Dis-landed ,now to be dis-housed

[james armstrong]

DIS-LANDED            You
have  been dis-landed. We can prevent
being dis-housed.

House-prices are at the heart of the economy. The mis-use of
houses as financial  ‘assets’ leads to
re-possession. 

Re-possession as a consequence of mortgage failure infringes
family welfare and human rights.  It is
un-necessary and  a change in legislation
can end eviction consequent on re-possession. Houses are primarily homes-
only incidentally are they assets to be traded. 


 

At present when a mortgage fails,  because of the design of the legal
arrangement it is the borrower who bears a disproportionate burden and it is
the lender, backed by all the  strength
of a corporation with wealth, with actuarial knowledge, with market information
and crucially with risk diluted  by
thousands of successful mortgages -this corportion is least affected by the breakdown.   Not least favourable to the lender is the
typical repayment structure for successful mortgages where over the period of
the mortgage the capital and interest paid by the borrower cover the  amount lent by £214,000 for every £100,000
borrowed.     

  

In a historical context 
pursuing re-possession of houses, at  present – affecting and devastating over 30,000
families a year ,  is the logical next
step to the ruling elite acquiring 
control of all land in UK and also control of everything built upon it, and of the lives and income generating capacity of the occupants of houses.

Yet there is no necessary or logical connection between being
distressed , giving up ownership of their house when  borrowers default on mortgage repayments and
being evicted. Evicting former owners un-necessarily is immoral. 

 

 A change in the law
would restrict the penalty for default to giving up ownership of a mortgaged
property but in the case where the property is 
the sole residence and home of the defaulter, the  new law would 
prevent consequent eviction. 
Ownership would transfer to the lender and occupancy would be
transformed from owner-occupancy to protected tenancy.

 

Nor is it open to  the
house-needy to side-step the rigged mortgage market by self building.  Land prices have risen sharply due to EU agricultural
subsidies paid to land owners. For permissioned land , the hoarding by
corporate housebuilders and wide-spread land speculation have ensured that
potential sites are virtually not available except at prohibitive prices.
Planning laws, designed to cope with a glut of post war housebuilding  become restrictive when supply of new-build dries
up. Higher standards applied to new build and requiring certification for
service providers help feed the monopoly of the corporate builders.  Lack of government recognition of the huge potential
of the self build sector accounts for their failure to support self build as a
vibrant alternative even when  the
corporate sector has manifestly failed. 

 

The theme which 
illuminates two thousand years of British history is the progressive
deprivation of the population  from
title, direct  use and access to land ,
employment on the land and their benefiting directly from the produce of land –
rapidly followed by the exploitation of the dis-landed society by the land-glutted
elite who go on to  institutionalize
their monopoly and defend it politically to the disadvantage of the majority.
5% of the population control 66% of UK
land. Seven giant housebuilding corporations control surplus permissioned land
equivalent to the total national  output
of new houses for seven years.    

 It is not a
co-incidence that at the root of  the 2008
financial crisis was the unsustainably large debt of mortgage payers to banks,
and it’s abuse - repackaged as an ‘asset’ and traded-on , nor that the
defaulters were the banks which hold the title deeds to millions of British
houses -‘Halifax- Bank of Scotland’, Lloyds Bank, Royal Bank of Scotland, nor  that the first UK bank to threaten collapse was
Northern Rock, which specialized in mortgage lending nor that the basis of Northern
Rock’s growth was the decades long 
increase in house-prices and  also
 the underlying cause of collapse was
their trading practice of funding long term mortgage lending by means of short
term borrowing –always fickle-in the money market.  

 

 The public
experienced this growing storm as rising and out of reach house prices and
wilfully  unsound mortgage lending
motivated by the lenders’ desperate need to sustain the house-price boom at
almost any cost.  This boom was supported
by the corporate house builders who restricted supply of new houses  to push up the prices of those they released
for sale. Government and Bank of England were both aware and complicit at an
early date in this as the then Governor, Eddie George’s evidence to the
Treasury Select Committee shows.  

 

The corporate house builders short-circuited the route to profiting
by the land monopoly by controlling virtually all permissioned land for
housebuilding in the UK,
(just seven of them in 2003 controlled enough land for  three and a half years’ requirement of all
the new houses for the UK)

Their landbanks yielded more 
profit  due to the land price hike
they had engineered, than did the (relatively few) houses  they trickled on to the market.  Not the least farcical outcome was that the  housebuilders on which the despairing government
and society relied to build  desperately
needed new houses were better rewarded for not building houses as the value of
their surplus  landbanks increased. ( I
can still hear their tearful cry “Three million by 2020” )

The corporate builders’  private anti-social gain in profits produced a
sector anti-social gain. Less houses built contributed to the industry goal of
pushing up house prices which was the pre-requisite for the  banks to sustain their credit explosion by
borrowing short (cheaply)  to fund long
term profitable lending.   The  industry’s 
refusal to contemplate the eventual consequences has been described as
“chronic recklessness powered by unchecked greed.”

 

The financial crisis coincided with the end of a sixteen
year house-price boom.

Houses were at the heart of the crisis typified by their
abuse as financial ‘assets’ not homes . Yet missing from the proposals to
prevent the recurrence of financial crises has been  any attempt to address the recurrence of a house-price
boom- perhaps the issue which most concerns most people. Also missing is any
attempt to release the permissioned land hoarded by corporate house-builders.
No steps have been taken to facilitate the presently atrophied supply of new
houses.  Amending the law on mortgages to
prevent families from losing occupation of their home when they lose possession
seeks to address one of the worst effects of the present mis-use of the housing
market 

Failing to do so sacrifices human rights  to economic opportunism, the common good to
private gain and welfare to greed.                     James                                                                                                                                                                          jca
: repo  

 		 	   		  
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