Left Out In the Cold
LONDON — HOMELESSNESS in Britain is becoming a national disgrace, say charity workers who help those in need. Yes, there has been rising prosperity under the free-market policies of Prime Minister Margaret Thatcher and her government, they say, but some families are left out in the cold.
One reason is the rapid rise in bank interest rates from 7 percent in June 1988 to 13 percent beginning this year. A higher interest rate has been the government's principal weapon in the war against inflation, but it can have disastrous social effects for families on tight budgets.
For instance, compared to last year, current interest rates bring a monthly increase of 100 (US$180) in payments on a house mortgage of 50,000 (US$90,000).
``Many people were heavily stretched when rates were at their lowest last year,'' says Matthew Shaps of Shelter, a private housing agency in London. ``Now that interest rates are going up, the combined impact will be very hard. We're forecasting an extremely severe problem later this year.''
Mr. Shaps says that each week around 450 families in Britain have their homes repossessed because of defaulting on mortgage payments. He forecasts that this could increase to 700 families a week in the months ahead. Those whose homes are repossessed by a lending agency are often ineligible for government assistance under current welfare rules, he says.
In the city of Bristol, 100 miles west of London, some 25 people each week are put out of their homes by court actions, according to Brian Cox, a legal aid attorney. Mr. Cox, who defends families against creditors, says that half of these people have defaulted on their mortgages and most of the others on rent payments. The situation in Bristol is typical of the rest of Britain, he claims. The next quarterly review of mortgage payments is expected to bring another stiff increase.
``I'm very concerned that when the new increases come in April there will be many, many more people on the streets,'' Cox says. The families involved include those who are earning 15,000 (US$27,000) each year as well as those living on social security, he says.
Private agencies do not have adequate resources to deal with this problem, says the executive director of Shelter, Sheila McKechnie. ``There is pressure building up in the government's own backyard to do something about housing,'' Ms. McKechnie says.