Against the sharks

12 February 2008

Last year 27,100 households were evicted and their homes repossessed, that is 74 per day. Lenders have the nerve to rejoice about this figure, because, as they say, it is "only" 23% higher than in 2006 and lower than they expected. But the fact is that it is the highest repossession figure since 1999.

Behind this figure, there are even more damning facts. The number of households which are more than 3 months in arrears reached 130,000 in late 2007. And this figure includes only some of the 700,000 who repay their mortgages using credit cards and other forms of credit.

House prices may have gone through the roof, but mortgage lenders have become even more greedy, especially now that the so-called "credit crunch" is a pretext to step up interest rates, even if the Bank of England has cut its own rate twice, over the past three months. As a result, the average payment on a new mortgage has increased by 18% over 2007 alone, far more than house prices and, of course, far more than house buyers' incomes.

The financial regulator, the FSA, estimates that due to this frantic greed, 2 million out of the 5.7 million households which took a mortgage over the past three years, will find themselves in trouble. Those most at risk will be found among the 1.4m house buyers whose discounted fixed rate is due to end over the next 12 months, because they will face a much steeper increase than they expected.

Among those in trouble, many will probably opt to become tenants of their mortgage lenders, to remain in their homes, but without any ownership rights and, eventually, paying an extortionate rent, all of their lives, for nothing in return.

Of course, there are ways of challenging all these shark lenders, by opposing repossessions collectively, for instance. But ultimately the real problem remains the fact that a whole layer of parasites make a living out of our need for a roof over our heads - in other words, the problem is the profit system itself.