The latest Government initiatives to revive the housing market, and that is the way that the press are reporting them, worry me. The initiatives are:
- a Stamp Duty holiday
- a scheme to give people an interest free loan deposit of 30% to buy ‘hard to sell’ city flats
- a new mortgage rescue scheme
- decreasing the time that those on benefits have to wait before getting help with mortgage interest.
Obviously only the first two actually help the housing market. I don’t have a lot of time for ‘the housing market’ or to be precise, one particular mortgage company, and when they hit problems a few months back I found it very difficult to be sympathetic (in fact I found it hard not to laugh). I am not in favour of encouraging people to buy houses; especially in times of possible recession. “Here, buy a house, don’t worry if you get made redundant, your marriage breaks down or you have an accident or a baby and are unable to work”.
The second measure seems even more flawed. If the reasoning is that people will flock to buy the hard to sell flats, which are falling in value anyway, then I wonder who will lend on them anyway.
What is this obsession with ‘owning property’, anyway? I keep getting told that it a mortgage is less than rent and gives you something to sell at the end. Except that for many who were mis-sold mortgages that would pay a lump sum at the end too, they ended up with a debt at the end. Or you discover that the house you bought has a serious defect, which was not picked up on the survey. Or you end up losing it through a change in personal circumstances and are treated like low life, as if you were some kind of criminal. To add insult to injury they send you a mortgage arrears advisor, who doesn’t advise you at all, they are actually employed to help the company decide if you are just refusing to pay or if you are likely to find a job or whatever. Then they charge you a week and a half’s benefit for the pleasure.
Call me bitter if you like but I have been through the experience of having my house repossessed; and it is no joke. I tried everything from contacting people how would buy the property and rent it back, but they were not interested, and the local housing office but they said come back when you are homeless (not their fault – they do what they can). Going to court was a nightmare; the day of the repossession was one of the bleakest days of my life. It was like a death in the family, and the repercussions of that experience are still with me.
I am very pleased therefore about the measures to help those on benefits – it would have stopped me losing my home, and it is estimated that it will stop that awful, gut-wrenching experience for 10,000 people. I never realised that I was one of so many. That so many of our citizens suffer this is appalling! I might argue that it doesn’t go far enough, two months arrears will still have to be paid. Still it has to be better than the current system where you are left without any help for 9 months.
Apparently there will also be the option of selling a share to your local council which will mean that you can pay the arrears.
I think, though, that we are going the wrong way about this. We should be increasing properties to rent. Renting is good. If the central heating breaks down – not your problem. These days you enter a contract with your landlord, and you know where you stand and the deposit system has been tightened up to stop those rogue landlords who keep your deposit regardless of the state you left the place in. You pay your rent by direct debit and everything is hunky dory. Then if you want to move it is much easier – no dependence on the housing market.
I understand (tried to substantiate it but can’t find figures) that Britain has a higher than normal proportion of owner occupiers. I seems that people feel that renting is only for the chavs. Well, there is no virtue in having a mortgage, you know!