Home repossessions up 15%

IveSeenTheLight

Can't believe this has not been posted and discussed yet.

http://www.moneysavingexpert.com/news/mortgages/2011/05/home-repossessions-up-15?utm_source=forum&utm_medium=sidebar&utm_campaign=box

Home repossessions have jumped by 15% during the early part of this year.
A total of 9,100 properties were taken over by lenders during the first quarter, 15% more than in the previous three months, according to the Council of Mortgage Lenders.
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The increase has been driven by high unemployment, with the latest figures showing 2.48 million people are out of work, as well as rising living costs, higher taxes and muted wage growth.
Although the number of people who lost their homes was 10% lower than in the first quarter of 2010, the CML expects repossession numbers for the whole of 2011 to be higher than last year at 40,000, up from 36,300, as households continue to face a squeeze on their budgets.
Paul Diggle, property economist at Capital Economics, says: "Against a backdrop of subdued wage growth and a weakening labour market, the rise in mortgage possession cases seen in the first quarter of the year is unlikely to be the last.
"It's plausible that, by the end of next year, both arrears and possessions surpass the peaks reached during the recession."
Drop in arrears
However, there was a further fall in the total number of people who were behind with their mortgage, with this dropping for the seventh consecutive quarter.
Around 166,900 homeowners were in arrears of at least 2.5% of their outstanding loan at the end of March, the lowest level since the third quarter of 2008, although there was a slight rise in the number of people who had arrears of more than 10%.
Repossession levels have remained lower than expected during the economic downturn due to a combination of low interest rates, Government support schemes and increased forbearance by lenders.
Michael Coogan, director general of the CML, says: "Looking ahead, the financial position of many households is likely to be stretched for some while, and some will inevitably find themselves in difficulty.
"Lenders have a range of options to nurse borrowers through temporary problems, but will clearly need to be mindful of the regulator's concern that too much forbearance may be as bad as too little."
Court orders up
The Ministry of Justice also released figures today which showed that repossession claims issued in courts in England and Wales rose for the third consecutive quarter during the first three months of 2011.
A total of 20,034 claims were issued, on a seasonally-adjusted basis, 3% higher than for the previous quarter and 8% higher than during the same period of 2010.
These led to 14,568 repossession orders being made, unchanged from the previous quarter and 2% up on a year earlier. Around 48% of the orders were suspended.
The North East and North West had the highest number of mortgage claims and claims leading to orders per 1,000 households, reflecting concerns that the economic problems and government spending cuts are hitting northern regions the hardest.

lemonjelly

It has:

https://forums.moneysavingexpert.com/discussion/3225728

IveSeenTheLight

lemonjelly wrote: »

It has:

https://forums.moneysavingexpert.com/discussion/3225728

Ah sorry, so it has been posted but not discussed

lemonjelly

IveSeenTheLight wrote: »

Ah sorry, so it has been posted but not discussed

Yeah. Saw the thread yesterday & was very suprised that it isn't something that has been picked up on.

Lenders appear a little more inclined to fiollow through?

In my experience, no judge will grant a possession order or eviction order from november onwards except in really severe circumstances, as they don't want to put people on the streets for christmas, so in reality the first quarter will generally see an increase.

southantrim3

And as the interest rates go up in the next number of months, expect the 15% figure to increase....

mbga9pgf

What are you expecting it to go up to?

southantrim3

If interest rates rose by say another 2% over the next couple of years I reckon 50% wouldn't be out of the question. Especially for those on tracker rate mortgages, combined with higher food prices and utility bills etc...

chucky

southantrim3 wrote: »

If interest rates rose by say another 2% over the next couple of years I reckon 50% wouldn't be out of the question. Especially for those on tracker rate mortgages, combined with higher food prices and utility bills etc...

do you think that 5.5 million people (that's 50% of people with a mortgage) won't be allowed to remortgage to a fixed rate mortgage?

and that's if rates go up...

southantrim3

chucky wrote: »

do you think that 5.5 million people (that's 50% of people with a mortgage) won't be allowed to remortgage to a fixed rate mortgage?

and that's if rates go up...

Did you not read the original post which was:

Home repossesions up 15%, not 15% of the population had their homes repossessed.

So my 50% refers to the amount home repossesions will increase by, not 50% of people with a mortgage.

chucky

southantrim3 wrote: »

Did you not read the original post which was:

Home repossesions up 15%, not 15% of the population had their homes repossessed.

So my 50% refers to the amount home repossesions will increase by, not 50% of people with a mortgage.

no sorry, i misread it.

MissMoneypenny

Money is tight.

The effects of the support for mortgage interest payments reduction that came in at the end of last year will start to cause problems soon for those that don't work and have a high mortgage interest payment. Those that MEWED are finding it even harder as they don't get the interest paid on that unless it was for essential work on the house, extensions don't count it seems. It will be interesting when the government removes the temporary extra mortgage support and drops it back to 100,000 (from the 200,000 temporary limit now) and 39 weeks before someone can get help (from the 13 weeks temporary time now).

A lot of people on the benefits board are feeling the pinch with their welfare top ups being reduced, but that only started in April. More welfare cuts next April then Universal Credits will be in and a lot of those self empoyed cooking their books to get a low income, will lose a lot of their welfare payments i.e. Working tax Credits: the farmers have already been moaning at a farmers union meeting apparently.

Those off work on the sick but are found to be fit to work are getting a reduction in payments: some are coming off the relevant benefit before the medical finds them fit. ESA sick payment (was incapacity benefit) seems to be £95pw as oppose to Job seekers of £65pw for over 25s. Some disability type payments are to be income based only now and many will have just one year before their payments stop.

An interesting thread has been running on the mortgages boards for those that will struggle if the interest rate is raised a little.