Warning over soaring homes waiting lists

The waiting list for council and social housing could stretch to five million over the next two years as more people are forced out of their homes because of mortgage arrears, town hall chiefs warned today.

Official figures published yesterday showed that court repossession orders sought by mortgage lenders soared to nearly 29,000 in the April-June period, leading to fears that the crisis could reach the proportions of the early 1990s. Some of the country's most prosperous areas are said to be the worst affected.

They include Stafford, where the number of repossessions was up by 71 per cent to 120.

Now the Local Government Association, which represents 400 councils in England and Wales, has warned of the knock-on effect on council and housing association waiting lists.

By the end of last year, 1.6 million households – or four million people – were on social housing waiting lists, which is an increase of more than 50 per cent since 2001.

House prices have risen by more than 150 per cent over the last decade, while average earnings have gone up by 35 per cent, and the credit crunch has seen a severe cutback in mortgage lending.

A recent LGA survey of local authority housing chiefs found that high prices remained the biggest reason behind increased demand for social housing.

But the situation has been made worse by record low levels of mortgage approvals and a rapid decline in house building.

The LGA is calling on the Government to give town halls the same freedom to borrow on the open market enjoyed by housing associations, and to allow councils to re-mortgage their assets to invest in house building.

Spokesman Paul Bettison said: "With the banks overstretching their credit facilities it could well mean that in the coming months councils will have to help pick up the pieces as people end up on housing waiting lists.

"Even when the economic good times were rolling, councils saw ever increased pressure on their social housing stock."