More Good News!!!

HAMISH_MCTAVISH

Never mind what estate agents or mortgage brokers have to say, the most encouraging news about hard-pressed homebuyers and house prices I have heard lately comes from a group of bailiffs.

Not many people associate debt collectors with good news – and even fewer would wish for one to knock on their door – but what they have to say today shows that thousands of British families are finally beginning to dig their way out of the debt crisis.

It also suggests that the housing market will avoid repeating the rout seen in the 1990s when many hard-pressed homebuyers simply gave up the struggle, posted their door keys through bank letter boxes and house prices plunged.

Here and now, the number of homebuyers in mortgage arrears who are repaying some of their debts is 43pc higher than it was two years ago, according to Ascent, the debt collection arm of national solicitors Irwin Mitchell.

That’s a big increase, taking the total of those paying down debts to more than half of all those who had previously missed at least one month’s mortgage payment. While fewer than 1pc managed to clear their arrears entirely in 2009, nearly 3pc did so during the last quarter.

Bear in mind that we are talking about people who are at the sharp end of the recession – most homebuyers would live on baked beans for a bit, rather than miss mortgage payments – so any sign of an upward trend must be welcome. Better still, Ascent’s sample size is a respectable 12,500 households in arrears.

Nor are the payments these families struggle to make trivial in value. More than a third – or 37pc to be precise – repaid arrears greater than one month’s mortgage bill; that’s twice as much as they did two years ago. Niall Gilhooley from Ascent, said: “Household incomes are under significant pressure from all sides but it appears people are determined to do all they can to work with their lender in order to safeguard their home.”

This would be a good point for me to note that Ascent’s staff prefer to be called debt counsellors, rather than bailiffs, but they remain the agents of lenders who would like to get their money back. They call on borrowers who have defaulted and discuss outstanding arrears with the aim of agreeing sustainable and affordable payment plans for clearing debts.

Paul Smee, director general of the Council of Mortgage Lenders commented: “It’s encouraging to hear from the grass roots that home visits are helping an increasing proportion of defaulting borrowers to get back on track.

“We still need to concentrate on making sure that borrowers get good quality advice and help at an early stage. Taking action early is usually the key to finding a suitable solution, while leaving problems to fester tends to make problems more difficult to solve.”

Adrian Coles, director general of the Building Societies Association, agreed: “Borrowers who speak to their lender promptly are more likely to repay their arrears than those who wait to make contact. Early contact enables the lender to consider all reasonable options to assist the borrower.

“Similarly, borrowers that seek independent debt or money advice are also more likely to repay their arrears. Repossession is the last resort for lenders and there are a range of measures that they can use to help borrowers remain in their home.”

Cynics may scoff but repossession really is bad business for lenders – and Mr Cole’s prediction a year ago that the 1990s housing slump would not be repeated has held good so far.

Plenty of people who dream of snapping up bargains after a house price crash accused him of wishful thinking at that time but events since then suggest they were the ones doing the wishing while he did the thinking.

It is fair enough for those in rented accommodation to hope house prices will fall but nobody in their right mind wants to see a re-run of the 1991 housing slump when 1,500 homes were repossessed every week.

That’s a lot of human suffering.

http://blogs.telegraph.co.uk/finance/ianmcowie/100011684/good-news-about-hard-pressed-homebuyers-and-house-prices-from-the-bailiffs/

So much for "can kicking". It seems the stimulus and support is working after all.

Interesting.

Pimperne1

Love this bit:

"Plenty of people who dream of snapping up bargains after a house price crash accused him of wishful thinking at that time but events since then suggest they were the ones doing the wishing while he did the thinking".

So HPCish.

Graham_Devon

3% managed to clear their arrears?

Wow.

That means 97% who are in arrears have not cleared them, in what can only be described as the most favourable time to be paying a mortgage in living history.

Surprising how little it takes to get some excited!!

Pimperne1

Graham_Devon wrote: »

3% managed to clear their arrears?

Wow.

That means 97% who are in arrears have not cleared them, in what can only be described as the most favourable time to be paying a mortgage in living history.

Surprising how little it takes to get some excited!!

or

"Here and now, the number of homebuyers in mortgage arrears who are repaying some of their debts is 43pc higher than it was two years ago, according to Ascent, the debt collection arm of national solicitors Irwin Mitchell".

That's gotta be good news.


Edit to say: The other quote was that 3% cleared their ARREARS ENTIRELY IN THE LAST QUARTER!

Graham_Devon

Right, so, let's all get excited eh?

43% more are repaying "some" of their debts.

Some could mean £1.50. It certainly means they can't manage to pay their full payment each month.

It doesn't say 43% more are now repaying their debts or arrears. Just says some. Therefore, the arrears could be getting worse each month for all we know.

This is desperate at best.

What's important is those clearing their arrears, and those now making full mortgage payments each month. We've got those clearing their arrears. Just 3%. It's tiny when you consider the favourable times were currently living in.

shortchanged_2

Hamish, this is hardly surprising with a BoE base rate of 0.5%.

If people can't cope with living costs with interest rates this low then they never will.

Pimperne1

Graham_Devon wrote: »

Right, so, let's all get excited eh?

43% more are repaying "some" of their debts.

Some could mean £1.50. It certainly means they can't manage to pay their full payment each month.

It doesn't say 43% more are now repaying their debts or arrears. Just says some. Therefore, the arrears could be getting worse each month for all we know.

This is desperate at best.

What's important is those clearing their arrears, and those now making full mortgage payments each month. We've got those clearing their arrears. Just 3%. It's tiny when you consider the favourable times were currently living in.

No pleasing you, first 3% wasn't much now 43% probably isn't much.

Graham_Devon

Pimperne1 wrote: »

No pleasing you, first 3% wasn't much now 43% probably isn't much.

It's not about pleasing me.

It's about looking at the data before reaching for the tissues.

Pimperne1

Graham_Devon wrote: »

It's not about pleasing me.

It's about looking at the data before reaching for the tissues.

Well lets take them apart then.

Is 1% of people managing to repay their entire debt over a year better or worse than nearly 3% of people managing to repay their entire debt over 3 months?

Is the figure of the 37% who repaid arrears greater than one months mortgage bill better than the half as many who did from two years ago?

Is it better or worst that 43% more people are repaying some of their debt than two years ago?

StevieJ

Why are people not happy to take on board some good news

Pimperne1

StevieJ wrote: »

Why are people not happy to take on board some good news

Because its not what they were promised. Because good news makes it less likely that Financial Armageddon will arrive. Because good news just kicks the HPC further into the long grass.