It may well be to do with ‘el credit cruncho’ but House is seeing a lot of folks who can’t afford their mortgage. In some of these cases the client will not have the costs of the mortgage met by the DWP and without any real prospect of getting into a position whereby they can once again afford to pay the mortgage the client is a bit stuffed.
Now when these people come to see House House will often think that it probably isn’t really reasonable for them to continue to occupy accommodation where they can’t afford their mortgage at the time, where even with help from the DWP they won’t be able to meet the mortgage repayments, where they aren’t eligible for the Mortgage rescue scheme and where they are unlikely to get a job that pays enough for them to pay their installments. Not only this but the longer they remain at the property the more equity they might lose if they don’t sell it or indeed the amount of negative equity grows.
Is House wrong in his thinking that in such cases (and House realises that cases are not rarely the same) that the client should be able to make a homeless application so as to ascertain whether it is reasonable for the client to continue to occupy their accommodation? Whilst they might choose to remain ‘homeless at home’ at least the client knows that if they sell the property they won’t be found intentionally homeless if a section 193 duty is accepted.
Local Authorities that House has come across seem to be wanting client’s to remain at the property until they get into arrears and the mortgage company starts proceedings (at obvious extra cost to the client). They have also been advising clients that they will be intentionally homeless should they sell their property which seems rather harsh when they haven’t considered whether or not it is reasonable for them to continue to occupy it.
House would appreciate the views of other jolly excellent people in respect to what they do with such clients.
Interested to see your replies from others as I’m currently running a similar argument at 202 review of an intentional homeless decision (although there are complicating factors – part of the argument is around the conditions of sale of the property, which was facing repo).
Certainly the LA’s first response was in the old ‘wait till the repossession order/eviction’ mould, but whether it is reasonable to remain when the result will inevitably be a repo’d property and very large amount of unsecured personal debt is surely an issue.
Cheers Nearly, interesting to hear you are running a similar arguement at the moment. It just seems incredibly stupid that a client who might not have done anything wrong may be forced to have their house repossessed which means that not only will it probably be sold for lesser amount but also meaning a whole lot of associated charges for the mortgage company.
But the question is always going to be the circumstances in which mortgage arrears built up. Was the mortgage affordable when taken out and would it be for the reasonably foreseeable future? Intentionality beckons…
Yeah I agree but the LA seem to have a blanket policy of telling everyone to stay until possession which is pretty harsh for those people who aren’t, when they are eventually allowed to make an application, found IH.
Also it may be harsh for those who are IH as at least that client group would know where they stood!
I’d be using the affordability arguments (Code of guidance stuff) but with a beady eye on intentionality
(was it affordable when they took out the mortgage, why can they no longer afford – why did they lose job etc)
Haven’t run this argument for a while but it doesn’t feel particularly new to me.
But …. the added problem nowadays is people have such complex debts and high mortgage to income ratios …. you can see it’s going to go pop very easily.
Cait
Cheers Cait,
It’s tough these days as soo many clients seem to have mortgages where if they lose their job they need another one on the same wage pretty much straight away to avoid falling in arrears as they have no savings.
Maybe we should get more people to stand as MP’s that way they can have two homes!
Perhaps if we moved away from the ‘must get on the housing ladder, must get on the housing ladder’ mentality we would have perhaps been better eqipped to deal with the current downturn?
Regards
Sharon
This was a great help to me so thanks for the advice!
Fascinating article, well thought of and well written with some very good advice in!