Home repossessions creep up, mortgage lenders say

Mallotum_X

A total of 9,200 homes in the UK were repossessed in the third quarter of the year, a slight rise on the previous three months, lenders have said.
There were 100 more homes repossessed than during the last quarter, and the same rise compared with the third quarter of 2010.
However, the Council of Mortgage Lenders (CML) said that there was a slight fall in the number of people falling behind with mortgage payments.
Low interest rates have helped owners.
"The fall in the number of mortgages in arrears, and the stable picture on repossessions, are testament not only to the beneficial effects of low interest rates, but also to effective arrears management, and good communication between lenders, borrowers and debt counselling organisations," said CML director general Paul Smee.
"Against the backdrop of widespread financial uncertainty sweeping both the UK and the wider European economies, it is impossible to be sanguine about the future influences that households may face.
"But lenders will do their utmost to help borrowers keep their homes, whatever pressures emerge."
Squeeze
The extent to which homeowners have managed to stave off problems in keeping up with mortgage payments has defied even the lenders' predictions.
The picture could become bleaker as finances become more stretched, lenders say
So far this year, a total of 27,500 properties have been repossessed, 4% fewer than the same period last year.
The CML said it now expected the total for the whole of 2011 to be lower than its forecast of 40,000.
Despite the squeeze on household finances, record low interest rates have meant that the mortgage bill for many families has been relatively low.
As a result, the number of mortgage payments in arrears fell slightly compared with a year ago, the CML said.
At the end of September, the total number of mortgages with arrears of 2.5% or more of the outstanding balance stood at 161,600, or 1.44% of all home loans.

This total was 2% lower than the number recorded three months ago, and 8% lower than at the end of September 2010.
But the CML warned that falling real incomes, rising cost of living, and more unemployment could push up the number of people facing mortgage arrears in the coming months.
Property investing

Separate figures published by the CML show that there was a 16% rise in the number of new buy-to-let loans advanced to landlords to 34,500 in the third quarter compared with the previous three months.
The number and value of these loans were at their highest level since the final three months of 2008.
The move comes as the cost of renting has increased to record levels, according to some surveys, owing in part to frustrated first-time buyers continuing to rent.
"With tenant demand remaining strong in the rental sector, some existing buy-to-let landlords have been expanding their portfolios and the growth that returned to the sector in the preceding quarter has continued," Mr Smee said.
"The recovery of buy-to-let from its low point in 2009 has helped improve supply and choice in the rental market."
However, he added that the amount of buy-to-let lending remained at just a third of the peak in the market.

http://www.bbc.co.uk/news/business-15672123

Mixed news, slight increase in repos, but overall less than this time last year.

BTL continuing to grow, although still significantly below peak.

OptionARMAGEDDON

Should have paid their bills. In other news, found out yesterday the previous repo'd cretin who owned my pad has been rather fraudulently arranging loans using this address!

IveSeenTheLight

Mallotum_X wrote: »

Mixed news, slight increase in repos, but overall less than this time last year.

CML in recent years have always needed to downgrade their reposession predictions.

Mallotum_X wrote: »

BTL continuing to grow, although still significantly below peak.

All lending is significantly below peak.
The fundamentals of lending has significantly changed in that time.

What is the increase in BTL compared to the increase in residential?

wotsthat

I'm struggling to find any significant bad news in there. Repo's flat and arrears down significantly - much better the gloom and doom merchants, which ironically includes the lenders themselves, would have us believe.

More choice and supply in the rental market too.;)

Mallotum_X

wotsthat wrote: »

I'm struggling to find any significant bad news in there. Repo's flat and arrears down significantly - much better the gloom and doom merchants, which ironically includes the lenders themselves, would have us believe.

More choice and supply in the rental market too.;)

If you are one of the 9000 then you might find that significantly bad.

Realmoney_2

How can so many get repossessed when interest rates are still so low? What will the numbers look like when interest rates are back up to more normal levels?

Mallotum_X

Realmoney wrote: »

How can so many get repossessed when interest rates are still so low? What will the numbers look like when interest rates are back up to more normal levels?

Really cant see any significant movement of rates for some time yet. Chances are that by the time rates are back up to normal (4 - 5%?) that repos will be a lot lower anyway.

wotsthat

Realmoney wrote: »

How can so many get repossessed when interest rates are still so low? What will the numbers look like when interest rates are back up to more normal levels?

Simple - a change of circumstances. A low interest rate isn't much good if you lose your job and can't cover the mortgage.

When rates get back to 'normal' my guess is that Repo's will still be low. If BoE rates went from 0.5% to 5% tomorrow then that's a different story. What's more likely is that they'll increase slowly as the economy improves and if the economy improves people will be better able to pay their mortgages.

I'd be much more worried about rising unemployment triggering repo's rather than rising interest rates.

Pimperne1

Pretty much proves what the BtLers were saying on other sites long before the crash. When prices reach a certain level then BtL becomes attractive again. When that happens they will buy. I think it provides a safety net for property prices and there are plenty of people out there who have seen that BtL is generally a "win win" investment.

Here are a couple of graphs on historical repos and payment arrears:

http://www.repossession-stoppers.com/repossession-statistics/

Mallotum_X

Pimperne1 wrote: »

Pretty much proves what the BtLers were saying on other sites long before the crash. When prices reach a certain level then BtL becomes attractive again. When that happens they will buy. I think it provides a safety net for property prices and there are plenty of people out there who have seen that BtL is generally a "win win" investment.

Not quite sure how you can say it proves anything. If BTL was stepping in then wouldnt there be more BTL than before rather than a lot less?

All it does show is that there is some return to the market from BTL'ers. We have to wait to see if it will be sustained, let alone replace the lost sales/ provide a safety net.

We also dont have any indication in these figures of regional trends. It may be that BTL is growing in say London but still falling elsewhere.

On the limited info available it is simply way too early to be jumping to such conclusions.


The graphs are interesting, although I hoped when I pressed the link they would show the 90s. I assume levels are lower now than in the 90s crash?

wotsthat

Mallotum_X wrote: »

If you are one of the 9000 then you might find that significantly bad.

You are now the owner of a cheap internet point - enjoy.

Rather than setting up a self help group for people who have been repossessed I thought we were discussing the wider data.

Clearly it would be devastating to be repossessed but the figures show that despite the economy the number is small and barely increasing.