The New Worker
The Weekly paper of the New Communist Party of Britain
Week commencing 1st February 2008
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MILLION MAY FACE LOSING HOMES
by Daphne Liddle
THE GATHERING credit crisis could lead to more than one million
mortgage payers losing their homes over the next 18 months according to
the City regulator, the Financial Services Authority (FSA).
Already the number of repossessed homes up for auction is rising
fast, according to leading auctioneer Allsop, who say that now nearly
40 per cent of houses up for auction have been repossessed compared to
20 per cent a year ago.
Gary Murphy, a partner at Allsop, said: “The number of
repossessions we deal with leapt after last summer. Between 45 per cent
and 50 per cent of properties in our last three sales were
The average sale price of properties auctioned by Allsop at the
last auction in December was £200,000.
Now the FSA says that a combination of huge mortgages, credit card,
personal loans and other debts, along with a steeply rising cost of
living is likely to put many home-buyers into serious financial
The FSA has listed three major risk factors, endangering mortgage
• having a loan with a repayment period of over 25
• having a mortgage worth more than 90 per cent of
• having borrowed 3.5 times or more than one’s income.
More than a third of all mortgages sold between April 2005 and
September 2007 had one or more of these risk factors.
But figures show that 1.04 million homebuyers fell into two of
more risk categories – making them “most likely” to be unable to keep
up mortgage payments. This group includes both first time buyers and
those who remortgaged from one deal to another.
Opportunities to switch mortgages now from one lender to another
in search of better terms are drying up and the credit crunch bites.
And banks and finance companies will be wary of homebuyers who are seen
as being too high a risk.
The FSA says that even small rises in household bills or
repayments will tip many families over the edge into being unable to
meet their mortgage commitments.
Some 150,000 buyers fall into all three risk categories and are
the most likely to have their homes repossessed.
If this happens, it will double the previous 1991 record of
75,540 repossessions in one year.
Home repossessions have risen from 3,700 between January and June
2004 to 14,000 in the same period in 2007.
Mark Sands, director of personal insolvency at the accountants KPMG,
said: “It is a ‘drip by drip’ problem.
“An extra £5 on their mortgage, £10 on their council
tax bill and so on is really putting the squeeze on people who are
financially overstretched already.”
An FSA spokesperson said: “We are not saying this scenario will
definitely happen but we want to raise awareness of the risks.
“With continuing uncertainty over the economy, it is more
important than ever for people to take care of their finances.”
The rise in repossessions with more of these houses coming up for
auction, along with the drying up of easy credit, is already leading to
a fall in house prices. The Land Registry reported that house prices
fell by 0.4 per cent in December.
The average price of a UK home is now £184,469.
House prices have for long been over-inflated and are way beyond
the buying power of most working class young people. That has not
stopped the banks and finance companies trying to exploit them through
life-long mortgage packages with low initial rates to hook them.
Now a million ore more face losing their homes in Britain’s
equivalent of the American sub-prime crash.
Housing associations – a semi-privatised form of “social” or
“affordable” housing are also falling into serious financial problems.
Britain already has a shocking housing shortage.
The only sensible answer is for local council to be enabled and ordered
to build hundreds of thousands of council houses to be let at really
affordable rents, and to enable families facing eviction for mortgage
defaults to approach their local authority to buy out the house and
then rent it to them as secure tenants.
LAST SUNDAY was commemorated
around the globe as international Holocaust Memorial Day, when we
remember primarily the victims of the Nazi regime: Jews, communists,
socialists, trade unionists, gays, Romanies, the physically and
mentally handicapped and many others. The purpose is not to keep alive
the hatred of the war years or to feel smug about our “superiority” to
the people of the Axis countries but to remember that societies that
thought themselves civilised and humane could so quickly become so
In no way can we feel superior when we remember the role of British
imperialism in the trans-Atlantic slave trade, the Irish famine of the
1840s or the massacre of Amritsar, of those carried out by Cecil Rhodes
in Africa and many other atrocities. American imperialism is guilty of
the attempted genocide of its own native peoples, of massacres in
Korea, Vietnam and many other places. Having said that, the death camps
of the Nazis are particularly shocking in their application of modern
industrial methods to pure murder.
These horrors are the product of ruling class greed and arrogance and
as long as the class divided society exists they can and will happen
again. And they have happened again: in the Congo, in Rwanda and
currently in Gaza.
It is ironic that General Suharto, one of the worst, died last Sunday
on Holocaust Memorial Day. This man led a western-backed military coup
in Indonesia against the popular left-wing government of Sukarno.
Suharto murdered at least one million Indonesian communists at the
behest of western imperialism because they had a “domino theory” of
communism spreading throughout south-east Asia. Now those same powers
have “game theory” and are claiming that it is necessary to use nuclear
weapons in pre-emptive strikes against other countries, just in case
they might be going to develop nuclear weapons themselves.
They talk about extremist fundamental Muslims being dangerous. We know
that these irrational extremist fundamental free market capitalists are
the real danger to the planet. We should not forget that even the
“mild” and “liberal” Bill Clinton described Suharto as “our guy” – a
man who murdered the children of communists and socialists in case they
grew up to avenge their parents.
Suharto then went on to lay his country open to the maximum
exploitation by the free market capitalists – laying waste the tropical
rainforests to loot the valuable timber and replace them with palm oil
plantations. A few years ago the skies over Indonesia were blackened
for months on end by fires raging out of control, which had been lit to
clear the jungles. Large numbers of rare animals and plants have been
rendered extinct and others threatened. And about two years ago
unregulated speculative drilling opened up an underground fountain of
foul-smelling toxic sludge that has since flowed out under pressure
from below to engulf vast acres of land and several villages. What was
once a jungle paradise has been turned into a living hell for the
people of Indonesia – by extreme capitalist greed.
The only safe place for these extremist fundamentalist capitalists is
on trial in international courts and then confinement in very secure
prisons or mental hospitals. Future generations will wonder why the
workers of this planet allowed ourselves to be ruled by such dangerous
maniacs for so long.
Keep political parties independent
to our own lunatic asylum in Whitehall, which is once again rocked by
evermore new evidence of sleaze in high places; the resignation of Hain
has revived calls for political parties to be funded by the Government
to eliminate the danger of corrupt donations.
This is an indirect attack on the influence of the trade unions on the
Labour leadership. Parties funded by the Government would effectively
be controlled by the Government. The party leaders would no longer be
accountable to their own memberships and ordinary citizens would lose
what little democratic influence they have on political affairs. The
parties would simply become a part of the state, controlled by the
ruling class for the purpose of controlling the working class.
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