ROOF Blog

Fears that millions of homeowners could soon be paying a heavier price for rising unemployment have been fuelled by the news that more than 20,000 people have, this month, seen the cost of mortgage payment protection insurance (MPPI) jump by about 20%. Yorkshire building society has pushed up the cost of its mortgage PPI in a move it says will typically add about £46 to the amount borrowers pay each year. The actual increases will vary, depending on the type of policy. The Yorkshire’s new mortgage PPI provider, Cardif Pinnacle, said that the cost of providing this cover ‘has risen to record levels’ following a huge increase in claims, presumably from homeowners losing their jobs.

FSA figures show 54,055 people had their properties repossessed during 2009, up from 46,945 in 2008. But there was a fall in both the number of repossessions and the number of people who were unable to keep up with their mortgage during the final quarter of the year. Around 11,800 homes were repossessed during the final three months of 2009, 15% fewer than during the previous quarter. The figures are broadly in line with ones reported by the Council of Mortgage Lenders (CML) for 2009, which showed that 46,000 people had their home repossessed during the year, the highest level since 1995. The FSA’s figures are higher than the CML ones because they include second-charge mortgages and loans advanced by lenders who are not CML members.

Around 300,000 people who had hoped to pay off their mortgage this year face shortfalls. They are all victims of missselling of 25 year with-profits endowment policies. Almost three million more people will suffer a similar fate in the next few years, according to the Association of British Insurers. At the peak of the 80s housing boom, homebuyers were encouraged to take interest-only mortgages and rely on investment returns from an endowment to repay the loan at the end of the term, usually 25 years. In the 90s, £50 a month policies regularly turned a £15,000 investment into a £100,000 return.  Today, they commonly pay out less than £30,000 for the same 25-year investment.

A homeowner has won a legal victory overturning a council order demanding he tidy up piles of rubbish from his Surrey garden. Mr Wallace was served a notice under Section 215 of the Town and Country Planning Act by the council in May, Guildford Crown Court heard. He was ordered to remove the plastic bottles, tins, newspapers and other waste, cut back overgrown vegetation and leave the land clear and tidy at his Westcott homes. But he appealed against the decision, at first unsuccessfully at magistrates’ court, and then at the higher court. In allowing the appeal, Recorder Christopher Purchas said the evidence ‘does not go far enough to show Mr Wallace was interfering with the amenity of other people who live in the locality’.

The UK industry should develop more products to help builders and property owners make the 5.5 million properties at flood risk in England and Wales more resistant and resilient to flooding, Environment Agency chairman Lord Chris Smith says. Speaking at the National Flood Forum annual conference, Lord Smith also encouraged building merchants and DIY stores to offer advice to builders and members of the public on how to make properties more resilient to floods, so that drying out and cleaning up is faster and cheaper following any flooding. A recent Environment Agency study into the devastating floods of summer 2007 found the average cost per flooded home was between £23,000 and £30,000 and a quarter of homeowners were not fully covered by insurance.

John Healey has extended the government’s campaign to help struggling homeowners get a grip on their finances and avoid repossession. Over 330,000 households have had help and advice with their mortgages over the past year. But with the pressure on families likely to remain high throughout 2010, starting this week the government is working with CAB to run a string of local help events in 56 repossession ‘hotspots’, so that struggling homeowners can get impartial face-to-face help and advice to keep their home. New radio and local press advertising in all 56 areas will also promote the free telephone advice line and special website to help homeowners struggling with their mortgage payments.

Hundreds of thousands of homeowners could be in line to collect hefty refunds for unfair mortgage charges as lenders face being forced to hand back millions of pounds in fees imposed on customers who missed their monthly loan payments. One firm has been fined £2.8million and made to return £7.7million to borrowers when it was found to have acted unfairly. The crackdown by the Financial Services Authority is likely to lead to claims by hundreds of thousands of home owners who believe they have been harshly penalised.

Tens of thousands of borrowers face a shock jump in mortgage payments after Skipton Building Society confirmed plans to raise its standard variable rate from 3.5 per cent to 4.95 per cent. The move, to take effect from 1 March, will raise mortgage repayments by up to 40 per cent for some borrowers, adding almost £200 a month to repayments on a £150,000 interest-only loan. Skipton, Britain’s fifth-largest building society, with 100,000 borrowers, previously had guaranteed that its variable rate would not rise while Bank of England base rate stayed at 0.5 per cent, but it has cited a clause in its loans’ small print allowing it to ignore the promise in ‘exceptional circumstances’. Skipton has blamed its decision on ‘unprecedented’ competition in the savings market from National Savings & Investments (NS&I), the Treasury-backed savings provider, and state- controlled banks. Experts say that other building societies are likely to follow suit and raise interest rates for homeowners on an SVR, the ‘revert’ rate that borrowers switch to when a mortgage deal ends.

The importance of social housing’s ‘heartlanders’ and their activism has been revealed in a report that says the most prominent group of social housing tenants are highly active in their neighbourhoods and play a crucial role in bonding communities. David Eastgate, Hyde Group chief executive, said: ‘Heartlanders are the glue of local communities and in many instances play a more active role than homeowners. They take on the responsibility to deliver regeneration and ensure sustainability.’ The report makes a number of policy recommendations to unlock the potential of those living in social housing.

More than 1 million householders have used credit cards to pay their mortgage or rent in the last 12 months, a new survey by ROOF reveals today. Despite restrictions on credit and reports of many people paying off personal debt, an exclusive YouGov poll for ROOF magazine reveals a disturbing picture of over a million people taking desperate measures with credit cards to keep a roof over their head. The highest proportion of those who pay their rent or mortgage through credit card were from working class professions (8% of those in the C2DE social grouping), but the poll also showed that middle/upper class (ABC1 category) are falling victim, with 4% of respondents saying they use credit cards in this way.