Bank repossessed houses - Our new Social Housing stock

[espadrille]

Around where I live there are many houses that are up for sale. I would guess that some of theses are in the price brackets of say between 300 and 400k

 

It seems that every week another one comes on the market.

I am wondering whether the surge in these houses coming on to the market has something to do with the worry/reality about job losses in the statutory sector.

 

Anyway, not mant have been sold, some have.

 

So eventually when they arent sold the sellers are faced with a choice. Ride it and stay or drop the price and take a hit.Problem being is that there will be fewer people around with this kind of money as there will be fewer around with the job that can afford to pay for houses like these.So if those people HAVE to sell if they loose their job and cant sell then the house will eventually be repossessed, but we go back to the old argument again about who actually owns a house when there is a mortgage attached to it.We had this discussion a few weeks ago in another thread.

[alchresearch]

It depends who you put in the repossessed houses.

[mj.scuba]

Depends how it would work. I wouldn't want some dross being put in the house next to me just because the previous owner lost his job. It would be better to help that person keep their home. Since the person whose house is being repossessed will probably need social housing anyway, the council could take on the home with the sitting tenant, then when they're back on their feet allow them to buy it back again.

[L00b]

So you are advocating stealing it from the banks?

Why would they go to the bother of repossessing it if it won't recoup any money for them?

If such a scheme as in the OP was ever enacted (), you would find the banks would just stop repossessions altogether and re-arrange payment of arrears with the debtor - hey ho, problem solved.

 

The public sector has never managed to "think like" the private sector. This is (IMHO) one of the main reasons why the public sector has reached such a size, as has the deficit. That problem is of course not limited to the UK.

[Tony]

Good idea for the banks we own, at least. You can't steal off the banks that we own a large proportion of.

 

The small matter of the law says different.

[Tony]

The technicalities of law aside, they don't even own it.

 

They own shares in some banks that have mortgage charges securing more or less cash against the value of some properties.

[andyofborg]

Where does the law say you can't take something you own?

 

Its a subtle point but a company is a separate legal entity and while the shareholders own the company they don't directly own things owned by the company. The only way for the shareholder to take the value of those things would be to either sell off the assets and distribute the money between the shareholders as dividends or liquidate and dissolve the company and distribute whatever cash is left.

 

Anyway, the government do not own 100% of the shares in any of the banks. If they were to try and enact this then the other shareholders would also need to be compensated for the value of the assets taken out in this way.

[horribleblob]

Depends how it would work. I wouldn't want some dross being put in the house next to me just because the previous owner lost his job. It would be better to help that person keep their home. Since the person whose house is being repossessed will probably need social housing anyway, the council could take on the home with the sitting tenant, then when they're back on their feet allow them to buy it back again.

 

My bold – I'd go with that.

[Grandad.Malky]

Just how is this barmy idea supposed to work?

 

Doesn’t a scheme a long these lines already exist, someone I know is about to have his house reposed and he says its being bought off the bank and then rented back to him, I don’t know if it’s the council that buys it or an housing association that does this.

 

A bank only repossesses a house to realise the value / loan and give the owner the difference back. Why would either of them give it away?

 

If there is any equity.... in most cases I would have thought the only equity would be a negative one or the owner would have gone down the sale / down size route.

[Cyclone]

Where does the law say you can't take something you own?

 

You don't (the government doesn't) own the property of even a wholly owned company (which the banks aren't).

 

I own my company, I can't just 'take' things from it though, legally it's a separate entity.

 

Now of course it would be possible if you were a majority owner to arrange to take possession at some negligible price, but which banks is the government the majority shareholder in? And in what way is it responsible ownership to inflate their bad debt in that way?

They've lent the money out to someone and it isn't being repaid. Rather than being allowed to recoup most of it by selling the house you're advocating that the owners just take that asset and the bank stands the entire loss.

Not a good way to stimulate the mortgage market even were the legalities worked out.