Marked increase in property repossessions

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Marked increase in property repossessions

    The following article appeared in a mortgage trade digital publication today and one that makes unfortunate reading, Repossessions are an emotional matter which affects all concerned , I certainly recollect in my younger days as a building society manager having to attend such instances and only those hard hearted enough would go away unaffected particularly when young children are involved.
    As a broker my observation is that in these days of easy credit borrowing facilities and a mentality of “ I want it now” is that this is often at the root of many resulting repossession orders, in fact I am astounded at the level of unsecured debt many prospective first time buyers have and who fail to understand the strict lending terms applied in determining overall affordability.
    A very sad article.




    "A shock 11% increase in repossession claims and 24% rise in mortgage orders by county court bailiffs point to British households increasingly being weighed down"

    The number of mortgaged properties taken into possession is continuing to rise, according to separate figures from UK Finance and the government, released today.

    The government data shows that mortgage possession claims have increased year-on-year for six consecutive quarters, following a three-and-a-half-year period of stability. There has been an annual increase in mortgage possession claims of 11% (to 6,258), mortgage orders for possession have increased by 24% (to 4,459), and repossessions by 9% (to 1,149).

    The UK Finance figures show that 1,330 homeowner mortgaged properties were taken into possession in Q4, an annual increase of 17%. 660 buy-to-let mortgaged properties were taken into possession, a 20% year-on-year rise. However, UK Finance noted that the increases are "from a very low base" and levels remain well below those seen between 2009 and 2014.

    UK Finance says the increase in possessions has been driven in part by a backlog of historic cases which are now being processed.

    UK Finance also reported a rise in repossessions in Q1, Q2 and Q3 2019.

    Steve Wilkie, managing director of Responsible Life, commented: “A shock 11% increase in repossession claims and 24% rise in mortgage orders by county court bailiffs point to British households increasingly being weighed down by financial pressures and struggling to make ends meet.

    “This sudden rise points to financial stress in the economy and will be a trend closely watched for signs that a more stable political climate since mid-December has been unable to reverse it.

    “Borrowers have a tendency to be shy about discussing concerns and changes in circumstances with their lender when they start struggling to repay a loan because they fear it will affect the rates they are offered. But this can lead to a build-up in financial distress, until ultimately lenders are forced to reach for the last resort of repossession."

    Mark Pilling, managing director at Spicerhaart Corporate Sales, said: “The latest UK Finance figures show that the long-term trend for increased mortgage possession activity is continuing. Although this is from a low base, it is still a sign that the uncertainty and low economic growth of recent years is catching up with household finances.

    “The data also points to an ongoing regional divide, with the three highest rates of repossessions all in the North-East of England. Interestingly, this is where many of the Conservatives’ recent electoral gains came from so it is clear they will be under pressure to deliver on their talk of ‘levelling up’ regional economies.

    “At the same time, regulatory changes are coming into force which, although well-intentioned, may have the short-term impact of making life more difficult for many people already struggling to make ends meet. People being required to step up repayments on credit cards and potentially pay more for authorised overdrafts will put even greater pressure on household finances.

    “Repossession should always be the last resort and lenders should always look to find another option if it is available. The lenders we work with all have a clear strategy in place to identify borrowers who are at risk of falling behind with payments and engage with them deliver the best possible customer outcome.”

    #2
    Not a surprise, and I suspect only the very start. The negative equity part hasn't really kicked in.

    Comment


      #3
      Thanks, very sad. When I think back if things had gone (illness, loss of job, relationship breakdown..) bad and could have had my home repo'd).

      Poor s+ds.
      I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

      Comment


        #4
        In the same period, landlord possession actions have all decreased.
        Claims, orders, warrants and repossessions by county court bailiffs have decreased by 12%, 12%, 20% and 9% respectively.

        Comment


          #5
          That does actually make sense.

          Low interest rates mean that lenders aren't making much from mortgages, so they have less incentive to try and hold off repossession.
          Part of the calculation for debt risk is the potential income and that's nowhere close to where it was, so you'd take action earlier, which means someone in difficulty has less time to recover.
          So more possessions.

          For landlords, low interest rates and interest only mortgages mean that costs feel lower, so they can be slightly more flexible with a tenant, giving a tenant in trouble more time to recover.
          So fewer repossessions.

          When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
          Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

          Comment


            #6
            Interestingly one lender has decided to withdraw from the BtL sector following a strategic review of lending, perhaps unknown outside of the intermediary sector but Axis was quite good.

            Comment


              #7
              Originally posted by jpkeates View Post

              For landlords, low interest rates and interest only mortgages mean that costs feel lower, so they can be slightly more flexible with a tenant, giving a tenant in trouble more time to recover.
              So fewer repossessions.
              I can see your logic but not sure it is right.
              Most repossessions are from social landlords.
              About half of private landlords don't have a mortgage at all (depending on which survey you read).
              So only a small proportion of all repossession landlords, say 15%, are reliant on mortgages. Fewer still reliant on the vagaries of bank interest rates. And the rates have been this low or lower since 2009.
              So what's changed?

              Comment


                #8
                Originally posted by boletus View Post
                I can see your logic but not sure it is right.
                Most repossessions are from social landlords.
                That's interesting.

                Not sure it changes my thinking - but I'm not really aware of how social housing providers operate.
                It's not something I have any experience of at all.


                When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                Comment


                  #9
                  I am sure that forum readers have done their own research on Social Housing Repossessions but here is an extract of an on-Line article which if correct does not account for a significant rise as an overall percentage of repossession orders.

                  ”London had the highest number of housing repossessions during the first half of the year at 1,291 (the equivalent of four repossessions a day).

                  The second highest after London was Birmingham which experienced 295 social housing repossessions in the first half of 2019.

                  In third position was Sheffield which had 144 cases of housing repossessions in six months.

                  Notably, Liverpool and Manchester are the other two cities which have had more than 100 social housing repossessions between January – June 2019. The latter with 115 and the former with 135.

                  In Wales, Cardiff had more social housing repossessions with 58 than Swansea which had 55.

                  On the other end, Cambridge had only 8 housing repossessions. Just above, Blackpool had slightly more repossessions at 10.

                  From the 25 major cities considered in England and Wales, there was a grand total of 2,880 social housing repossessions in the time period of January – June 2019.

                  Comment


                    #10
                    Originally posted by loanarranger View Post
                    I am sure that forum readers have done their own research on Social Housing Repossessions but here is an extract of an on-Line article which if correct does not account for a significant rise as an overall percentage of repossession orders.
                    They are two separate statistics.

                    Repossessions by mortgage lenders are up.
                    Repossessions by landlords are down.

                    The article you are quoting is only talking about mortgage repossessions.

                    Comment


                      #11
                      Hi Boletus
                      i had deduced that the possession stats related to Social Landlords , I.e LocalAuthority/ Housing Association, I cannot source what percentagerelate to Private Landlords but I will see if I can find them.

                      Comment


                        #12
                        It's all here (and it's where your article is drawn from);

                        https://www.gov.uk/government/collec...ion-statistics

                        There's a bit of a crossover with social and private landlords (e.g some social landlords can use the accelerated procedure).

                        But there is a clear cut minimum 60% of all landlord repossessions are from social landlords. Private landlord reposessions are consistently lower. It's nearly always been that way.

                        Comment


                          #13
                          The Holy Joes preach about judging each tenant as an individual (whilst never doing it themselves).
                          And banning 'No DSS' adverts is a great money making campaign for the housing charities.

                          But the unpalatable truth is DSS tenants are far higher risk.

                          Comment


                            #14
                            Boletus I believe the problem lays in a genuine lack of financial education , having undertaken numerous sessions with youngsters who are in their final years of education as well as being invited to address people engaged in religious matters and based in areas of deprivation but for whom there is a genuine level of naivety in understanding money management and it is sad that genuine people find themselves having to take from Peter just to Pay Paul and being on the interminable treadmill of trying to stay afloat. It isn’t fair to appear holier than thou when the truth is that if everyone had an understanding of managing money the incidence of experiencing what this topic is about might be mitigated and indeed could gradually remove the negative perception of being a DSS claimant.

                            Comment


                              #15
                              Having experienced personal financial meltdowns, once as a result of being made redundant and once as a consequence of having to take a huge cut in income, I have a lot of sympathy with people who get into financial difficulty.

                              At one point, a sympathetic person at Northern Rock agreed to suspend mortgage payments for six months while I got things back together, while my credit card company accepted reduced monthly payments. Without that breathing space, I'd have been part of these statistics.

                              And I was (and am) a financially careful, risk averse adult with a decent income.
                              It can happen to anyone.
                              When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                              Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                              Comment

                              Latest Activity

                              Collapse

                              • Reply to Mortgage News
                                by loanarranger
                                To help clarify the changes relating to TMW & Nationwide I am detailing the new LtV’s across both brands.
                                Nationwide for Intermediaries
                                Max LTV Transaction type
                                ...
                                01-04-2020, 10:58 AM
                              • Mortgage News
                                by loanarranger
                                The following article has appeared in one of the Mortgage Trade journals reporting on views expressed by the Association of Mortgage Intermediaries an influential trade body within the mortgage industry.

                                "Mortgage rates are likely to rise in the first quarter of 2016 as lenders look...
                                23-12-2015, 19:43 PM
                              • Reply to Mortgage News
                                by loanarranger
                                Metro Bank have placed a maximum LtV of 80% across its residential mortgage range.

                                Bank of Ireland have dropped the maximum LtV on itsresidential products to 85%.
                                01-04-2020, 10:54 AM
                              • Reply to Mortgage News
                                by loanarranger
                                Nat West have just announced that they have placed a maximum LtV 80% for all new residential house purchase applications.
                                01-04-2020, 10:45 AM
                              • Reply to Mortgage News
                                by loanarranger
                                Hi Sam-Cat
                                Thanks for your kind comments.
                                At 60% LtV I doubt that you will have too much difficulty in getting another deal even though it is Barclays , but that is for another day.

                                Before leaping into a new deal , do explore what alternative facilities might be available to...
                                01-04-2020, 10:43 AM
                              • Reply to Mortgage News
                                by sam_cat
                                Thank you for keeping us in the loop in these worrying times.
                                Just thankful that I am sat on ~60% LTV before all this, hopefully Barclays wont have any issues giving me another deal (circa 6 months till its due)
                                01-04-2020, 09:46 AM
                              • Reply to Mortgage News
                                by loanarranger
                                I thought I would share with you a set of stats relating to the dramatic changes occurring within the Residential & Buy to Let Mortgage products.
                                On 16th March there were 20000 mortgage schemes available but on 30th March this had shrunk to approximately 11500; a number of lenders have suspended...
                                01-04-2020, 09:24 AM
                              • Reply to Mortgage News
                                by loanarranger
                                The following lenders have today made announcements governing future lending at least whilst the uncertainty continues because of the Coronavirus and Institutional funding:

                                Virgin Money has suspended all new purchase applications across its mortgage range and Remortgage Applications have...
                                31-03-2020, 17:10 PM
                              • Reply to Mortgage News
                                by loanarranger
                                I thought I had closed the day on an optimistic note but sadly I have received a communication from Foundation Home Loans that they have withdrawn from lending across its entire range until the situation returns to normality.
                                This is disappointing as they were in the minority for providing funding...
                                30-03-2020, 18:17 PM
                              • Reply to Not paying btl mortgage
                                by sam_cat
                                https://uk.virginmoney.com/virgin/mo...yment-holiday/

                                No idea if that applies to BTL, but certainly no harm in filling it out and also trying to contact them....
                                30-03-2020, 17:37 PM
                              Working...
                              X