Healey, speaking on BBC Radio 5 Live today, said that some people would not be able to afford their mortgage repayments even if their repayments were renegotiated.
Healey provoked the outrage of the mortgage industry in December when he suggested the Government should tackle the culture of parents helping their children get onto the property ladder and said the era of aspiring to own a home may be coming to an end.
The comments come as the Council of Mortgage Lenders today reported that repossessions increased 15 per cent in 2009 at 46,000.
He said: “For some people it can be the best option for them to allow their home to be repossessed.
“Some families may not be able to keep up with mortgage repayments even if they are renegotiated and rescheduled. There is no accounting for every circumstance.”
He added that circumstances do vary, but in some cases repossession is the only option.
He said: “Repossession is a permanent feature of our system in good times and in bad. In some circumstances it may be the only option available to them.”
The Tories have described Healey’s comments as “unbelievable” while the Liberal Democrats said it would be better for him to keep his mouth shut rather than making “grossly insensitive” remarks.
Conservative shadow housing minister Grant Shapps says: “Having previously admitted that he thought it was good for home ownership to be falling, it is unbelievable that John Healey has now claimed that repossession can be the best option.
“Tell that to the 46,000 families who have been booted out of their homes in the past 12 months thanks to Labour’s record recession.
“This proves once again that Labour ministers have completely lost touch with reality.”
Liberal Democrat shadow housing minister Sarah Teather says: “If this is John Healey’s best response to record repossession figures then he should just shut up.
“These comments are grossly insensitive to families booted out of their home. Labour has no idea what life is like for victims of the recession.
“John Healey needs to get out more before he starts dismissing the misery of homelessness.”