North home losses double in two years

May 10 2008 by Adrian Pearson, The Journal

THE number of North East families losing their homes under a Labour Government is rising, with some parts of the region seeing the number of court orders for repossessions increase by more than 100%.

The threat to homeowners comes as it was revealed that the Government’s efforts to reduce the North South divide has actually led to an increase in the wealth gap.

Labour ministers have been told by statistical experts that the pay gap between the North and the South has risen to £311 in just two years.

The relative drop in wages follows inflation rises and a hike in fuel bills, leaving North East households among the worst off in the country.

And the pressure on North MPs is set to increase as figures reveal repossession orders applied for in Newcastle courts have more than doubled in just two years.

As more North homeowners face being hauled before the courts in the battle for their family house, opposition MPs and housing experts are calling on the Government to do more than just blame international credit problems.

Last night, shadow Tyneside minister Alan Duncan condemned the Government for failing to act sooner.

“It is utterly unacceptable that repossession orders have doubled in Newcastle. We called on the Government to provide more debt advice more than 18 months ago.

“And in December, David Cameron called on mortgage lenders to warn borrowers when cheap rates were coming to an end and to consider staging interest rate rises. While we welcome the Government’s belated talk of action, it is too little too late”.

The most recently available repossession figures show the number of orders issued by courts in the region has doubled, with the majority of the increase coming in the last two years.

Just 2,551 homes faced the threat when Labour came to power in 1997. Within ten years that figure had risen to 5,125.

Newcastle has seen one of the most dramatic rises, with the courts seeing cases more than double from 309 in 2005 to 730 last year.

And Government estimates for the first three months of 2008 show repossession orders up 28%.

In Morpeth, courts covering Northumberland saw the total rise from just 89 when Labour came to power to 288, according to the Government’s most recent figures. While the figure represents court orders and not the final actions taken by mortgage lenders, housing experts have insisted the Government must act to prevent the situation worsening.

Caroline Davey, from housing charity Shelter, said banks and building societies were not doing enough to keep repossession figures down after pulling 100% mortgages from the market.

She said: “Those lenders have now retracted all of those mortgages. But what they haven’t done is put their hands in their pockets to help the many thousands of people who are struggling, having taken on mortgages that they simply can’t afford.”

Housing Minister Caroline Flint said: “It is important to recognise we are dealing with an entirely different situation in the market from what was experienced in the early 1990s. The fundamentals of the housing market remain strong with high employment, low interest rates and long-term demand for homes from first-time buyers.”