THE Thatcherite dream of creating a nation of home owners is already a nightmare for millions struggling to make their mortgage repayments. It is set to become a full-blown meltdown in the New Year, according to the Bank of England.
In its ‘Financial Stability Report’ issued yesterday, the bank warned that seven million home owners face the risk of falling behind in their mortgage repayments and house repossession if, as expected, the bank’s interest rate is increased next year.
An increase, from the current record low level of 0.5 per cent, is widely predicted as British capitalism faces a sharp rise in inflation.
An increase of one per cent in interest rates would translate into an increase for a family with a modest £150,000 mortgage into an extra £80 a month in repayments.
With inflation already rising sharply – officially the Consumer Price Index (CPI) has shown a jump from 1.9 per cent to 3.3 per cent and this is a very low estimate of the real increase in the cost of living – even the Bank of England is getting worried that house repossessions will reach levels never seen before.
Already one million families are in arrears on their mortgage repayments, with housing charity Shelter estimating that even at present every two seconds someone faces losing their home.
All this is taking place at a time when local councils are preparing to send out redundancy notices to 100,000 council workers, where unemployment is set to rise to 3.5 million in 2011 and where those still in work have seen their wages cut, through below-inflation pay rises or no rises at all.
The decision by the coalition government to increase VAT to 20 per cent, effective in January, will create what is now being termed a ‘perfect storm’ for home owners.
The working class and vast sections of the middle class, who have seen their jobs and wages going down the drain, are now faced with losing their homes to the banks.
For those clinging to the fantasy being desperately pumped out by Tory and LibDem coalition partners that salvation is to be found in the private sector, and that private companies are set to expand and take up the hundreds of thousands of jobs being destroyed in the public sector, the Bank’s report contains a devastating statistic.
This is, that 30 per cent of UK companies did not make enough profit to cover their interest payments on loans, or to put it bluntly are bankrupt – and this was a year ago!
With the seven million working class and middle class ‘home-owning’ families now set to join the millions of council house tenants, who similarly face swingeing and unaffordable housing cost increases in a new year of homelessness, it is clear that capitalism can no longer provide even the most basic of human requirements – shelter.
Those trade union leaders who have accepted job losses and pay cuts, as the inevitable price for keeping the banks afloat, must now be told in no uncertain terms to either mobilise the strength of the trade unions in a general strike to bring down this government and go on to a workers government – or go.
The housing crisis cannot be solved within capitalism. The capitalists are quite prepared to see millions on the streets rather than see their profits eroded.
The only solution to the crisis in housing is to overthrow capitalism, and take the profit out of housing through the nationalisation of the banks, the building societies and the building industry.
Those leaders who refuse to fight this government must be removed and replaced with a new, revolutionary leadership that will advance humanity to socialism.
There is no other way!