A/68/289 Northern Ireland, of which 350,000 have been empty for more than six months; 9 in the United States 14.2 million homes have been vacant for more than one year. 10 7. In her previous report, the Special Rapporteur analysed the main housing finance policies implemented as a means of facilitating access of the poorest to homeownership. The sections below summarize the main findings with regard to the impact of those approaches on the right to adequate housing of those living in poverty. A. Mortgage markets 8. In recent years market-based housing finance has rapidly spread throughout the world, mainly targeting the more affluent segments of society that have had the initial capital to take a mortgage, profiting lenders through the payment of interest. Traditionally, mortgage finance has been considered unattainable for the poor owing to issues such as lack of land titles, low and erratic income and employment in the informal sector. 9. However, during the past two decades new mortgage products were designed specifically for borrowers with low incomes or poor credit history 11 who were not eligible for regular mortgage finance, generating sub-prime loans. Although those lending policies were intended to enable access to credit for low-income households, they are extremely discriminatory: the poorer the credit taker, the higher the interest he/she has to pay. High-interest loans led to ever-increasing household indebtedness, economic insecurity, mortgage arrears and repossession rates. Poor households were forced to reduce expenditure on other essential needs, like food or medicines, in order to meet their housing debt. 12 10. The adverse effects of housing credit growth on affordability have also been visible at the macroeconomic scale. Wider access to mortgage loans resulted in higher and more volatile housing prices. 13 Increasing dependence on mortgage credit, private institutions and connection to broader developments in the global capital markets has overexposed national housing systems to the turbulence of global finance, raising levels of debt and concentrating risks among individual households. Countries that adopted an open system of mortgages, based on subprime loans, easily granted credit and the securitization of mortgages, have seen a serious crisis since 2008. 14 11. The discrepancy between income levels and soaring housing and rental prices coupled with increasing unemployment have led to more payment default, __________________ 9 10 11 12 13 14 13-42184 See The Great British Property Scandal. Available from http://www.channel4.com/programmes/ the-great-british-property-scandal/articles/about-the-campaign/. See http://www.realtytrac.com/content/news-and-opinion/americas-142-million-vacant-homes-anational-crisis-7723. World Bank, Thirty Years of World Bank Shelter Lending: What Have We Learned?, Robert M. Buckley and Jerry Kalarickal, eds. (Washington, D.C., 2006). Mark Stevens, “Tackling Housing Market Volatility in the UK: a progress report” (York, United Kingdom, Joseph Rowntree Foundation, May 2011), p. 82. International Monetary Fund (IMF), Global Financial Stability Report: Durable Financial Stability — Getting There from Here (Washington, D.C., 2011), p. 134. See A/67/286 and A/HRC/7/16/Add.2, A/HRC/10/7, A/HRC/13/20/Add.4 and A/HRC/16/42/Add.3. 5/24