Repossession can be the best thing: In defence of the Housing Minister
In 2009 46,000 housholds had their home repossessed. This is a dreadful figure, repossession represents a dreadful thing to happen to anyone at any point.
Much reporting has focussed on the fact that this ugly figure, the highest for 14 years, is lower than the lending industry had predicted. It should be noted however that when the lenders make predictions about repossessions they do tend to err on the side of caution and then get a 'repossessions lower than expected' good news story out it. Indeed they are already saying that their 2010 estimate looks 'pessimistic'.
We should be under no illusions as to the reality of the situation. The efforts of lenders and government have been welcome and interest rates of 0.5% have helped keep the figure lower than might otherwise have been the case, this may not be the case in future. Interest rates rising is a 'when' not an 'if' and rising rates equals rising mortgage costs which, if coupled with inflation pushing up the cost of living could be a nasty cocktail for many households.
Amidst this the Housing Minister, John Healey, was raked over the coals by the national media and opposition parties for saying that, 'In some cases [repossession] is the best thing for people who are struggling with mortgages'. Grant Shapps, the Conservative Shadow Housing Minister said this comment proved that Labour had, 'completely lost touch with reality'. This type of reaction to Mr Healey's comment is unfortunate for the simple reason that, whilst he might have sounded insensitive at the time, far from losing touch with reality, Mr Healey is right.
A home repossessed is a tragedy, every time. It is never a 'good' thing as some of the newspapers have mistakenly attritubed Mr Healey as saying. There will though be difficult instances where, out of a list of bad options a well managed process of repossession is the 'best' thing for some people. In a situation where the house cannot be sold and the debt is likely to form a millstone round someones neck for year after agonising year, it is better that they be helped to give the property up to the lender and helped prepare to find alternative accomodation in the rental or social housing markets.
Organisations who provide free and independent help on mortgage issues such as Citizens Advice or the Consumer Credit Counselling Service (CCCS), would recommend exactly that course of action in some instances. It will never be an ideal outcome but it can be one which allows people to get back on their financial feet, remove the pressure of unaffordable mortgage payments and move as quickly as possible back to a sustainable life situation and that, ultimately, has to be the best thing.
