mortgage repossessions continue to fall

dopester

The SMI scheme was originally started by the Labour government in November 2008. To try and cope with the threat of repossessions, the mortgage interest rate which it paid was increased, temporarily, to 6%.

Actually, now reading more what Shelter have put out, from this BBC link... they don't half whine on don't they.

They are making a huge fuss that little notice was given about the cuts in the SMI rate to be paid.

Shelter is also angry about the amount of notice that people like Amanda were given before the changes were brought in.

She received a letter three weeks before she had to find the extra money.

"Nearly a quarter of a million people have had hardly any notice at all about a very significant change," he said.

I seem to remember knowing for quite a few months this SMI reduction change was coming. (From 6% to 3.65% on 1st October 2010, in line with average mortgage rate actually prevailing.)

Here you go >>>>> "The decision to cut SMI was made in the government’s emergency Budget in June as part of a raft of measures to cut public spending." Maybe not giving the full extent of the drop (although I have remember it being known soon after) - but thread upon thread from mid September, post upon post, of people telling about their shock/anger at receiving a letter from the DWP about the drop in the SMI rate.

If I was on SMI, which of course I never would be... I'd spend a minute googling every day or week for any looming changes.. as well as having monitored the June emergency budget where it was clearly stated and reported.

And, with the government changed the market playing field entirely when it appeared there would be a high level of repossessions to come. Going mostly from having individuals being expected to stand on their own feet to meet the mortgage debt they've willingly taken on and contracted to pay... rolling out the red carpets with (amongst other things, including a high interest rate that over-paid many mortgages [90%] via the SMI high interest rate level), and...

The Government has also revised Support for Mortgage Interest (SMI), reducing the waiting period from 39 to 13 weeks, increasing the eligible mortgage value to £200,000 and maintaining an elevated rate of Standard Mortgage Interest Rate until the end of the year. The introduction of the Pre-Action Protocol for Mortgage Arrears Claims in the County Courts was brought forward to November 2008, requiring lenders to satisfy the courts that possession is the action of last resort.

Amanda Copeland has to find an extra £400 a month. What's going to happen to us?

I don't know.. 3 kids.. given up your job... where's your husband? Do you really believe it's fine to have taxpayers keep picking up the tab for your mortgage... when a whole load of tenants renting in the private sector have to pay full rent rate?

Graham_Devon

The number of people struggling to pay their mortgage has surged by 78 per cent in the past year, according to figures issued by Shelter this week.

Anyone know why this is?

Interest rates haven't gone up....more and more poeple will be coming out of fixes onto variable...unemployment rate is pretty static.

Yet people struggling to pay mortgages is up 78%? I'd have assumed, with the interest rates and people coming off fixes, affordability in terms of paying the mortgage would be getting better?

Not sure what's making it harder for people for the figures to rise 78%?

Maybe it's something to do with all the part time jobs being taken, rather than full time ones, which unemployment figures don't show?

Can't be all to do with SMI, can it?

IveSeenTheLight

Graham_Devon wrote: »

Anyone know why this is?

Interest rates haven't gone up....more and more poeple will be coming out of fixes onto variable...unemployment rate is pretty static.

Yet people struggling to pay mortgages is up 78%? I'd have assumed, with the interest rates and people coming off fixes, affordability in terms of paying the mortgage would be getting better?

Not sure what's making it harder for people for the figures to rise 78%?

Maybe it's something to do with all the part time jobs being taken, rather than full time ones, which unemployment figures don't show?

Can't be all to do with SMI, can it?

Would the number be making a difference.
78% of what?

Ah I see it now. It was 10% of homeowners having a problem and now it's 18%, that making an increase of 78%

Graham_Devon

IveSeenTheLight wrote: »

Would the number be making a difference.

Not really. It's a large rise.

Personally don't think it's a trivial rise just because it's based on 10% moving to 18%. Carry that sort of rise on for a couple of years and you will be at 50% of the nation struggling. So it's not small numbers.

I'm just wondering what's causing it.

IveSeenTheLight

Graham_Devon wrote: »

Not really. It's a large rise.

Personally don't think it's a trivial rise just because it's based on 10% moving to 18%. Carry that sort of rise on for a couple of years and you will be at 50% of the nation struggling. So it's not small numbers.

I'm just wondering what's causing it.

Do you envisage it continuin for a couple of years and reaching 50% Graham?
I would doubt so given that it's based on homeowners and not mortgage holders.

That said you could probably put a higher percentage on mortgage holders.

You wonder what's causing it and there may be a number of things

1) Reduction in SMI
2) Increase in car insurance
3) Increase in the cost of food
4) Increase in the cost of cotton socks
5) Reduction of working hours
6) Reduction in benefits (child benefits etc)
etc
etc
etc
etc
etc

It won't be down to just one thing
Indeed the article gives some of these factors

With petrol, energy and food prices all going up – and January's VAT increase set to impact too – families are at as much risk as ever

P.S. It's a funny thing about stats, the increase of people apparently struggling is 8% of homeowners, yet the article uses 78% as the increase of those already struggling.

You wouldn't think that they use the 78% instead of 8% as a way of sensationalising the story do you?

Graham_Devon

IveSeenTheLight wrote: »

Do you envisage it continuin for a couple of years and reaching 50% Graham?
I would doubt so given that it's based on homeowners and not mortgage holders.

Probably not, I'm just saying it's not a small increase. I would think that's pretty obvious, what with it being 78%.

IveSeenTheLight wrote: »

You wouldn't think that they use the 78% instead of 8% as a way of sensationalising the story do you?

Not really. If they are talking about people struggling, then why would they use a different set of people to produce figures on?

Thrugelmir

Graham_Devon wrote: »

Not really. It's a large rise.

Personally don't think it's a trivial rise just because it's based on 10% moving to 18%. Carry that sort of rise on for a couple of years and you will be at 50% of the nation struggling. So it's not small numbers.

I'm just wondering what's causing it.

Debt.

Borrow today pay tomorrow culture is finally catching up.

As non-existant wage inflation is no longer eroding debt as it has done in the past.

This seems to apply to all tiers of society. Even though interest rates are so low.

We now seem to be paying for the years of phantom economic growth.

IveSeenTheLight

Graham_Devon wrote: »

Probably not, I'm just saying it's not a small increase. I would think that's pretty obvious, what with it being 78%.

Oh dear.
I'm not going to be drawn into statistical debate with you, but let me put this point accross to you for consideration.

A company of 100 employees decide to let 10 people go.
That represents 10% of its workforce.
They then decide to have a further round of cuts and pay off a further 8 people.
Would you say the company increased it's redundances from 10% to 18% or that the redundances increased 80%

Can we use that methodology when looking at other statistical factors?

I.e., you would say that transaction levels are approx 50% of 2007, but we could say that it only decreased by a fraction of a percent of homeowners

Graham_Devon

Yawn, bored. I wasn't here to massage figures to suit. Just here to try and look at the reasons they are increasing (whichever way you wish to work it out).

IveSeenTheLight

Graham_Devon wrote: »

Yawn, bored. I wasn't here to massage figures to suit. Just here to try and look at the reasons they are increasing (whichever way you wish to work it out).

That's fine,
You've seen a few responses on that note then.

It's far more informative to say an 8% increase from 10% to 18% that it is to say a 78% increase from the 10% base