Safe as houses: the saying entered the language around 1860 as the railway construction boom peaked and speculative interest reverted to bricks and mortar. For thousands of Scottish households struggling to meet mortgage payments in a falling market, the expression has acquired a sickeningly hollow ring.
Since the summer, court actions for home repossessions have exceeded 1000 a month, double the 2007 level. Without fresh thinking and urgent action, the number of households facing eviction this winter will rise sharply. Many are genuine hard-luck cases: low-paid workers pushed into home ownership for lack of suitable rented housing; those who secured debts against their homes and have been caught out by the credit crunch. With a drastically curtailed choice of mortgage deals and increasing numbers falling into negative equity, more borrowers are being pushed over the brink. And those who lent most irresponsibly are now the most aggressive in pursuing struggling homeowners.
In many policy areas, the Scottish Government has proved politically nimble in responding to new realities: by bringing forward spending on affordable housing and setting up a government-sponsored mortgage-to-rent scheme, for instance. However, the introduction in England and Wales of pre-action protocols for mortgage arrears to ensure that repossession really is the measure of last resort has left the Scottish administration looking distinctly flat-footed. Protestations yesterday from Deputy First Minister Nicola Sturgeon that Scottish homeowners already receive this protection do not stand up to scrutiny and by last night there were promises of a rethink. A visit to her old office at Govan Law Centre would demonstrate why it is necessary.
This year the centre has been flooded with cases where impatient lenders seem determined to go to law and reluctant to negotiate. Because borrowers must indemnify lenders for the bank's legal expenses under Scots Law, lenders can use the threat of court action as leverage to obtain larger or quicker payment of arrears. The 2001 Mortgage Rights (Scotland) Act merely brought Scotland in line with the situation in England since 1970. Unlike the new English protocols, it does nothing to prevent repossession actions being raised, actions that cost the borrower at least £1000. There is no practical reason why Scottish courts cannot be provided with a checklist to ensure that the lender has exhausted all other options before resorting to law.
Also, while English borrowers are entitled to free legal representation at county court hearings, many Scottish families - including many households on income support - are being forced to meet their own legal bills. This, too, requires attention.
The boot is on the other foot when it comes to mortgage-to-rent. The government-backed Scottish scheme is clearly superior to the situation in England and Wales, where unregulated rogue operators in the sale and lease black market are exploiting vulnerable homeowners. However, increasing numbers of Scottish homeowners are now falling into negative equity, rendering them ineligible for the government scheme and driving them back on private arrangements that frequently offer poor value and little security.
The Scottish Government scheme requires the flexibility to enable it to help those in negative equity to weather the economic storm. A government loan might cost taxpayers less in the long run than providing for a homeless family on benefits. Repossessions are a necessary last resort, but every homeowner should be treated with fairness and dignity.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article