This is the opinion of Natalie Elphicke, a leading housing lawyer in Save 100,000 Homes from Repossession, published today by the Centre for Policy Studies.
The Centre believes that far more effective would be to learn the lessons of the 1990s housing recession when the civil courts, not government intervention, played a far more active role in helping people keep their homes. Similar action today could, if the trends of the 1990s were repeated now, lead to 100,000 homes being saved from repossession.
A summary of key points is as follows.
• Expect 150,000 home repossessions in England and Wales both this year and next.
• Current Government proposals are unlikely to help more than a very small number of these households.
• Instead, the Government should learn the lessons of the recession of the early 1990s: then the civil courts played a far more important role in keeping people in their homes than any of the government schemes then available.
• Court guidance for dealing with repossession hearings should be improved to assist those in need. This would also help to maintain the correct legal and contractual framework for the mortgage industry.
• Assuming that the arrears patterns of the early 1990s were to be repeated, such a change in court practice could lead to 100,000 homes being saved from repossession.
• These proposals will only help those households which are considered by the courts to be able to repay their arrears and their mortgages. The risk of ‘moral hazard’ will therefore be minimal.
• These reforms would be practical; would take account of individual circumstances; would have a negligible cost for the taxpayer; and should be supported by the mortgage industry.
