Widening the mortgage safety-net; some questions of effectiveness

Despite benign economic conditions, home ownership continues to manifest risk in the form of mortgage arrears and possessions. Since 1995, the policy objective has been to transfer the major responsibility for protecting mortgage payments to the individual and the market. Limited take-up of mortgage payment protection insurance has led to a suggestion that a wider range of insurances and other resources now constitute the safety-net. The article presents results from the first national study to consider the range and distribution of potential safety-net provision (insurances, personal resources, flexible mortgage wealth, employee benefits and state support). The article concludes that: the safety-net is widely drawn; its effectiveness is jeopardised by the degree to which household cover remains partial in terms of covering all contributors and key eventualities; 40% have no insurance at all; and approaching one fifth of mortgagors have no safety-net at all, or an incomplete safety-net. Overall, the evidence indicates a significant policy failure.