The difference Labour have made for homeowners is clear

By Chris Williamson

In December 1993 a local magazine, Derbyshire Now, published a piece I had written about the aftermath of the late 1980s and early 1990s property boom that saw record numbers of repossessions (left). When I wrote that article 16% of mortgage holders were in negative equity.

Now, 16 years later the situation is very different. The worst worldwide economic downturn since the 1930s, fuelled by the collapse of the so-called US subprime property market, could have had disastrous consequences for the UK. Had the policies pursued by John Major’s Conservative government prevailed today the situation would indeed have been considerably worse. If repossessions, arrears and negative equity were running at the same rate this year as in the early 1990s, 91,000 households would have been repossessed, 396,000 would be in arrears and 2.2m would be in negative equity.

I’m not seeking to minimise the difficulties some homeowners have encountered in recent times. I understand the anxiety that is suffered when householders fall into arrears. I’ve seen the heartbreak people feel when their home is repossessed. And I’ve personally experienced the distress caused by negative equity. I watched the value of the house I bought in 1988, at the height of the property boom, plummet in value to well below what I paid for it.

The measures introduced by this Labour government have saved thousands of families from the same housing traumas that people went through 20 years ago. The Council of Mortgage Lenders (CML) has said it is going to revise its forecast on the numbers of repossessions this year from 65,000 to 48,000. The CML has also said it expects the numbers of homeowners in arrears by more than 2.5% of their mortgage balance to be considerably lower than it originally anticipated. Its latest forecast puts the figure at 195,000 rather than 360,000. And up to a million more households were in negative equity in the early ’90s compared to today.

In 1991 alone, 75,500 households lost their homes but Labour has tightened the rules to ensure that repossession is now always the last resort. Lenders have been forced to consider all other options to keep people in their homes, including the government’s Homeowner Mortgage Support Scheme and the Mortgage Rescue Scheme. This includes having to satisfy tougher tests in courts, with a new checklist for them to prove they have exhausted every possible option before taking action against borrowers. They have also been forced to inform local authorities when repossession action is started against residents, allowing councils to step in to offer advice and help. But Derby’s Liberal Democrats, who currently run the city council, have resisted the government’s schemes to help borrowers.

Not content with flouting government measures to assist hard pressed home owners, the Lib Dems joined with the Tories and so-called independent councillors to vote down the Labour Group’s proposals to assist Derby’s struggling homeowners. It was actually pretty nauseating to witness their indifference towards thousands of their constituents fearful about keeping a roof over their heads.

That one incident in Derby’s council chamber in March this year gave a clear insight into the mindset of other political parties. It gives a pointer to how a future Tory government would leave people to fend for themselves resulting in more people being at risk of losing their homes. The choice couldn’t be clearer: people can vote go back to the devil take the hindmost approach to the economic downturn, exemplified by Margaret Thatcher and John Major, or vote to keep hope alive with Labour.