Personal Finance: Keep home fire burning

THE Council of Mortgage Lenders is expected to announce a further decline in repossessions and mortgage arrears this week.

So even though the housing market has failed to spark into life, a slight rise in house prices and continuing low interest rates have eased the housing strain.

The Government seems to be using this turn in the housing cycle to try to pull away the social security net from home-owners.

It wants them to take out their own insurance against redundancy or sickness - conditions that render them unable to keep up their mortgage payments.

At present, home-owners who qualify for income support can get the interest on up to pounds 125,000 of mortgage borrowing paid by the state. There used to be no limit, until the publicity spotlight fell on Peter Julian's pounds 630,000 mortgage on his Hampstead home.

Andrew Longhurst, chairman of the Council of Mortgage Lenders, warned the Government that taking away this support would knock away the bottom rungs of the housing ladder.

People on modest wages with scant savings would not dare to embark on home ownership without this comfort. But lenders are also pursuing their own interest by adopting a more prudent and pessimistic lending policy, further marginalising the low- paid, self-employed and those with insecure employment.

It is in all home-owners' interest to have people knocking on the door behind them - rather like a pyramid selling operation. No one already aboard the merry-go- round wants the music to stop. So we must all be kinder and take care of those who suffer when the fun-fair judders.

THE Nationwide Building Society tries very hard to be democratic. Last week, it held elections for the board but only about 2.5 per cent of the 3.5 million voting members bothered to vote - even fewer than last year.

None of the three 'outsiders' was elected, while all the board-nominated candidates were returned. It does not look as if building society democracy is thriving.

But I predict that the Cheltenham & Gloucester will be returning to the fray next month with a new scheme to smooth its path up to Lloyds Bank's door. It needs a healthy turnout and a hefty vote of confidence to get anything through. But the lure of lucre should bring out the votes when it counts.

YOU MIGHT have noticed that parking wardens look a little different these days.

They have shed their links with the police and are now operated by local authorities.

As a result, parking fines have been decriminalised and are now handled by the county courts rather than magistrates' courts.

You might think, then, that failure to pay a parking fine would lead to a county court judgment that could tarnish your credit rating when it comes to applying for a credit card or loan.

But no. The Registry of County Court Judgments was so worried that it would be overwhelmed that an exception is being made for parking fines, and they will not appear as county court judgments on your credit files.

But if you get up to any funny business, such as offering a dud cheque to pay the parking fine, then it will haunt your financial life.