ROOF Blog

The number of families forced to hand back the deeds to their home in the recession has been understated, according to the Conservatives, because the official figures exclude ‘sale and rentbacks’. There were 48,000 repossessions in 2009, compared with 75,000 in 1991 at the peak of the last recession. Labour said the figure, which was lower than some earlier predictions, was proof that its measures had worked. But Grant Shapps, shadow housing minister, has claimed that the true number of people losing their homes is far higher. The total cited by Labour, he said, did not include those homeowners who sold their home to a landlord and rented it back in an attempt to remain in the property.

Thousands of homeowners in municipal tower blocks are facing potentially huge bills, as councils rush to improve fire safety precautions in the wake of a blaze in London earlier this year which killed six people. Leaseholders in one high-rise building have already been asked to pay up to £15,000 each, after an emergency fire brigade inspection found a series of potential dangers and ordered immediate work including re-wiring the building and replacing fire doors. Experts on tower block fire safety believe that a significant proportion of high-rise blocks remain unsafe, in part due to a lack of maintenance of features such as fire doors, but also because of botched renovation work over decades.

The number of repossessions orders taken out by mortgage lenders rose by three per cent during the third quarter of the year to 13,987, figures from the Financial Services Authority (FSA) have shown.

Despite the increase, the FSA said the number was ‘much in line’ with the average for the year as a whole and six per cent below the figure for the first quarter of the year.

The drop is likely to have been driven by interest rate cuts at the start of the year, which made mortgages more affordable, and increased government help for struggling borrowers.

The FSA said the number of borrowers who had fallen into mortgage arrears of more than 1.5 per cent of their outstanding loan had fallen for the third successive quarter, and at 46,000 was down 10 per cent on the three months between April and June and 30 per cent below the peak in the last three months of 2008.

Homeowners facing repossession or struggling to meet mortgage payments after losing their jobs will continue to receive extra support from the government following the pre-Budget report.

The government has said it will freeze the standard interest rate used to calculate its Support for Mortgage Interest (SMI) at 6.08 per cent for a further six months. It said the SMI scheme has benefited around 220,000 homeowners.

From April this year, the government said it would cover the monthly interest due on mortgages of up to £200,000 for borrowers who have been out of work for three months and were having difficulty meeting their payments.

Previously it only offered support to homeowners with mortgages of £100,000 or less.

Tax rebates for people who ‘go green’ by installing solar panels or wind turbines on their homes or swapping their company car for an electric vehicle will be announced by Alistair Darling tomorrow.

Although his pre-Budget report will include few giveaways as he promises to rein in a £180bn budget deficit this year, the Chancellor will give householders and drivers a financial incentive to play their part in saving the planet.

At present, people who sell electricity to the National Grid are taxed on the income. In future, it will be exempt from tax.

A householder on basic rate tax selling £900 of electricity to the grid from April would receive the full amount, instead of £720 as at present.

The meltdown in the American housing market is not over yet, with experts warning that a rise in home foreclosures next year and in 2011 could undermine the chances of a sustained economic recovery in the United States.

The Obama administration has set aside $75 billion (£46 billion) under its homeowner bailout plan, known as the Home Affordable Modification Programme, to allow up to four million American homeowners to reduce their monthly mortgage payments and keep them from defaulting on their loans.

Yet despite efforts by the US Treasury Department to step up pressure on mortgage companies to modify more loans, take-up has been slow and the programme has been widely condemned for providing insufficient help to borrowers who have lost their jobs or who owe more than their homes are worth.

As many as 95,200 homeowners over the last two years decided they could no longer remain in their properties because of fights with neighbours, according to a survey.

However, the most common reasons for moving home saw one in three households move to climb up the property ladder and one in five moving because they needed more room, based on a total of 680,000 home owners moving since 2007.

Other popular reasons for moving home included relocating to a new job and moving into a better school catchment area.

Homeowners who are selling their properties are required by law to declare any arguments they have had with their neighbours.

The Chancellor should double the tax relief on income made from renting out a spare room when he delivers his pre-Budget report on 9 December, according to the National Landlords Association.

The NLA hopes that Alistair Darling can be persuaded to raise the tax-free ‘rent-a-room’ threshold from its current level of only £4,250 – a level it has remained at since being introduced in 1997.

Since that time, rents have more than doubled in most parts of the country, shrinking the value of the original income threshold.

The NLA is one of several organisations supporting the Raise the Roof campaign, which is lobbying for an increase to £9,000 per year.

‘Raising the tax-free threshold for live-in landlords would provide an important boost to homeowners who are facing difficulties meeting their mortgage payments,’ said Chris Norris, NLA policy manager.

‘For many, the extra rental income really could mean the difference between paying the mortgage and losing their home.’

A Communities and Local Government select committee has reported that if the government is to meet its house building targets it must bring in new measures to support the mortgage market. The committee warned that the Treasury’s asset-backed guarantee scheme was not enough to kick start the housing market, and was ‘doomed to fail’. It also criticised the government for focusing on owner occupiers at the expense of the private and social rented sector.

Housing minister John Healey has told a Common’s Treasury select committee that he would consider extending the homeowner mortgage rescue scheme beyond its current two-year limit, if the economy continues to struggle beyond 2010. He also rejected accusations that the government had been ‘complacent’ with its support for those at risk of repossession, although he warned that ‘a certain level of repossessions is inevitable’ in a recession.