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Repossession and Mortgage Arrears

That is certainly true, and many of us are aware that unemployment levels have doubled or more in our constituencies—albeit from a low level, but the increase has been alarming. The hon. Gentleman is also right that towns and cities in the east midlands are often the most affected. He mentioned his constituency but I believe that Northampton, Peterborough, Derby, Nottingham and Lincoln, for reasons that are not totally clear, appear to be affected worse than other parts of the country. I would guess that there was a temporary over-supply, and that private developers were too aggressive and underestimated the potential extent of a downturn in the market. He is right to draw attention to local variations. Perhaps I could proceed from that point to review each of the elements in the Government's intervention one by one. As I acknowledged at the outset, they have cumulatively had an impact and have generally been welcomed by people who deal with homelessness and the consequences of repossession. The pre-action protocol was something that my colleagues and I specifically called for more than a year ago. I recall asking the Prime Minister about it in the Chamber. The Government have delivered a programme that gives the courts guidance to ensure that mortgage lenders take proper account of the circumstances of the borrower. It requires lenders to look at other options, involves financial advice and treats repossession as a last resort. So far, there are some positive indications about the operation of the programme. The majority of judges appear to be taking it into account. There is feedback from a survey done by Shelter and Citizens Advice that more than half the mainstream lenders have adjusted their lending behaviour to take account of the improved court procedure, although, regrettably, only 20 per cent. of sub-prime loans invoke such a response. Having said those positive things about what has happened so far, it is fair to acknowledge that there are serious limitations with the scheme. Many of us hope that the Government will build on what they have already done. First, lenders do not respond at all in a significant number of cases. That is particularly true in the sub-prime area, but not exclusively so. There appears to be no provision to deal with lenders who are wilfully non-compliant. Some lenders take no notice whatever of guidance from judges. They press for repossession and make no effort to help their struggling borrowers. What is probably required is a fresh round of guidance from the Government as to how to deal with non-compliant behaviour by lenders. Perhaps the Minister in his reply could give us some indication as to whether there will be any follow-up action. Under that general heading, there is an acknowledgment that the pre-action protocol has exposed serious weakness in mortgage law in some key areas. Colleagues and others may wish to develop that point. There are two problems in particular. One is the extent to which a large number of borrowers are now exposed to repossession as a result of second charges, many of them for fairly trivial amounts of consumer borrowing, yet they face the loss of their home. The lack of protection in that area is palpable. Then there is the kind of case that many of us are encountering in our constituencies in which there is default on a buy-to-let mortgage not by the resident but by the property owner. Large-scale default is taking place in the case of buy-to-let mortgages, and many tenants are being thrown out of their property at short notice. The Government have given some indication that they are preparing to legislate to provide more protection. It would be useful if the Minister were to give some indication about how and when that is due to happen. My hon. Friend the Member for South-East Cornwall (Mr. Breed) suggested in the context of the Banking Bill a particular formulation for a new legislative framework to help buy-to-let tenants. Have the Government had an opportunity to review it, and how do they react to it as a legislative proposition? To summarise, the initiative has been welcome, but there are severe limitations, and, of course, it has built up a pipeline of arrears cases without necessarily solving them. Secondly, we move on to the mess of the mortgage rescue scheme, which is probably the least successful of the Government initiatives. The concept is an attractive one: enabling people to stay in their home as tenants or in a shared ownership arrangement. That is much preferable to existing rent-back arrangements in which some private landlords behave in a somewhat disreputable way towards people who have entered informal rent-back arrangements that are not properly regulated. In theory, the Government's scheme is attractive and we should welcome it. When it was introduced, we were told that it had the potential to help some 6,000 people. At the end of April, only two applications had been approved, which I know is a source of some embarrassment. Is the Minister in a position to tell us what the number is as of this morning? Numbers were supposed to have appeared today. There are two big problems with the scheme as the Government are currently administering it. One is extreme complexity. All the financial advisers who have guided people with arrears problems into it have reported that whereas a private rent-back arrangement probably takes about a week to set up, which may be because some operators cut corners, the Government's scheme appears to involve a five-month process, which is extraordinary. It is excessively legalistic, and I wonder what the Government are doing to streamline the exercise. The other problem area is the one that we have already heard about from the hon. Member for North-West Leicestershire (David Taylor), which is that many families are excluded by a tight definition of homelessness. I have written to the Minister for Housing about a particularly bad case in my constituency of a father who has predominant responsibility for a daughter, but in the messy, complex arrangements that now exist for families that are breaking up, not full responsibility. He is not protected under the council's—ultimately, the Government's —definition of homelessness. What are the Government doing to make their definition of accessibility to the scheme more flexible? Clearly, there have to be some limits, but can they be applied more sensitively to make people in real need eligible for the scheme?