How to help struggling home-owners keep their homes

Yesterday Vince Cable and the Liberal Democrats proposed a series of measures to help tackle the soaring number of repossession:

Vince Cable, the Lib Dem Treasury spokesman, said change was needed urgently to stop the “downward spiral” of Britain’s housing market.

Proposals include a mortgage rescue scheme, which would allow families struggling with repayments to sell all or part of their house to a housing association or private firm and then stay in the property as tenants.

The government should also allow councils and housing associations to borrow money to buy up land and empty new homes “to help replenish Britain’s much-depleted stock of social housing”, the Lib Dems suggest. (The Scotsman)

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8 Comments

  • I love Vince.

    He dances around the opposition – just when the orthodox view grows to the point where the two largest parties have reached the same conclusion and accepted reversing their similar interventionist policies in favour of allowing the market to correct itself, up pipes Uncle Vince to shatter the consensus to say that their new policy would have far-reaching effects which would likely create further damage.

    Not only does Vince show both Tory and Labour to be wrong, he shows them to be fools too.

    Surely in the right world they should have seen this coming, but clearly they’ve both taken their eyes off the ball and are looking over their shoulders.

  • David Heigham 28th Aug '08 - 3:22pm

    Chris,

    House prices should fall, are falling and will fall. (Declaration of interest: a mortgaged flat in London is a major asset for me.)

    The problem Vince ia addressing is three part:
    - eviction is bad for family life,
    - there is a clear need for more social housing in many places,
    - left to the market, house prices can be expected to fall more than is necessary or healthy.

    His solution is to buy up houses that would be foreclosed on (at, I assume, valuations subjected to some type of discount or “haircut”) to make up the stock of social housing. That should reduce misery, improve our stock of social capital and smooth a desirable market adjustment; all at a cost of an increase in public borrowing matched by an increase in public assets. Further, it would be administered locally without a lumbering, distorting Whithall mechanism. All good LibDem sense I think.

  • Of course letters from a tory has no idea about anything – he seems to be the Harry Enfield paraody Tory Boy made flesh.

    Heaven alone knows why he wastes his time on Lib Dem Voice. At least some of the other Conservatives can make interesting or relevant points.

  • foreclose the mortgage from a troubled home owner and sell the house in open market. Now buy the house that the home owner can afford from the open market.
    There is no need for home owner to stay in the home that they can’t afford. Lets not reward the people who were speculating and living above their means.

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