Radical steps are required to ensure that the homes of hundreds of thousands of Britons are not at risk of repossession when the Bank of the England begins increasing interest rates, according to the Resolution Foundation. The foundation has proposed that the Government sets up a scheme to help people avoid losing their homes by making a “soft exit” from the market. One option suggested would be to allow owners to “trade down” to shared ownership, in which a state-funded “registered provider” would buy a stake in the property, leaving the borrower to pay a smaller mortgage and subsidised rent on the share of the home they no longer owned. The report also urges the Financial Conduct Authority to force lenders to make contact with the 2m people most vulnerable to a mortgage rate increase and give them free debt advice.
This is why M C Escher’s home never got repossessed. He had radical steps. However, what the Resolution Foundation is suggesting is arguably far less illusory. Their press release is here. It uses the term mortgagors – which could in the singular have been mistaken for a kingdom of Middle-Earth – and clarifies that the most vulnerable 2m of them (as mentioned above) are a worrying 2 million in number, rather than an overbearing 2 metres in height (like the pensioners we commented on last year).