UP to 1.5 million fixed rate mortgage holders are going to have to renegotiate their mortgages in the New Year.
Many of them are already finding that mortgage interest rates have shot up so much that they cannot afford what is on offer.
Now they are being told by the banks that the best thing that they can do is to be among the first to auction off their homes to try and save something from the debacle.
Many of these people have paid their mortgage dues fully and on time for a number of years.
No wonder that hundreds of thousands of mortgage holders are living in fear and are getting angrier and angrier about their situation.
In fact, mortgages became even more expensive to re-pay in October, the Council of Mortgage Lenders (CML) confirmed yesterday.
The CML said that just the interest repayments swallowed up 20.6 per cent of first-time buyers’ monthly incomes.
That was up from 20.4 per cent in September and the highest level since 1991.
The higher mortgage rates will lead to more repossessions, as a wave of fixed rate deals come to an end and mortgage lenders boost their rates.
The auctioneers Allsop said yesterday that among the properties they auctioned, the number of repossessions has risen from 25 per cent to 50 per cent during the past year, and that total repossessions will rise by 50 per cent, with 30,000 repossessions by the end of the year.
The deepening mortgage crisis began in the US, then spread worldwide with the run on the Northern Rock bank that had to be bailed out with over £30 billion of the taxpayers’ money.
This bank is now losing £1.5 billion a week.
As the mortgage crisis worsens, a number of other banks will join the Northern Rock bank in bankruptcy.
Yesterday Liberal Democrat Vince Cable called for the Northern Rock bank to be nationalised. He said it was ‘bleeding to death’ and public ownership would provide much-needed stability.
He said he was not making the call ‘for political reasons’, adding that he understood ‘that people in the Treasury and Bank of England are already preparing for public ownership’.
He said efforts to sell to a private buyer were not succeeding and that temporary measures needed to be taken to secure taxpayers’ money.
‘The consortiums that are involved are struggling to raise the vast amount of money that’s needed and we are talking here about raising £30bn – roughly the size of the current defence budget – in order to repay the taxpayers’ loan.
‘Temporary public ownership would enable the bank to secure a period of stability . . . Once the bank is under temporary public ownership – I stress it’s temporary, not a permanent solution – it enables the banks to be reassured who are lending, that there’s an absolute sovereign guarantee, and it provides a period of stability.’
Cable is proposing that the taxpayer puts tens or even a hundred billion into Northern Rock before handing it back to the bankrupts who own it. It is to be a Welfare State for bankers only.
The duty of the taxpayers is to rescue the bankers who have just, or are about to, take their homes off them, or worse, according to Cable.
At a time of worldwide and deepening banking crisis, that this is the road to state bankruptcy is obvious.
It is not just one bank that needs to be nationalised on a temporary basis. The entire banking system needs to be nationalised and put under workers management on a permanent basis as part of the socialist solution to the crisis of capitalism.
The bankers and the bosses must be expropriated and the vast mortgage debt abolished, as part of a socialist transformation of society, with the anarchy of capitalism replaced by the construction of a planned socialist economy.
