Home repossessions set to rise

The turbulent state of the UK’s economy is continuing to put financial pressure on homeowners, with the number of repossessions set to increase over the next 12 months.

According to the Council of Mortgage Lenders (CML), the number of home repossessions is set to rise to 45,000 this year, up from 37,000 last year.

The first three months of 2012 saw 9,600 repossessions, up by 10% from the last quarter of 2011. Repossessions made up 0.16% of all properties under mortgage in the first half of 2012.

Although the CML says that the figures are stable compared to those from a year ago, it argues that they have been exacerbated by the rise in the cost of living, squeezed incomes and ‘economic and employment uncertainty’.

“That repossessions are likely to rise for the year as a whole is depressingly predictable. Although interest rates are expected to remain at 0.5% for the foreseeable future, a growing number of borrowers are still struggling,” said Mark Harris, chief executive of mortgage broker SPF Private Clients.

“Mortgage rates continue to rise, despite the non-movement of base rate, with more than a million home owners seeing an increase in mortgage rates in May, for example. Those with little or no equity in their homes don’t have the luxury of being able to remortgage onto a cheaper deal.”

May saw mortgage rates rise for more than a million homeowners after a series of increases from lenders. This rise is said to have been attributed to soaring lending costs and the faltering economy.

The CML has urged the government to support those consumers that are struggling by extending some temporary benefit arrangements for at least another year.

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Posted by: Nicola Severn Categories: Finance Tags: , 15 Comments

15 Responses to Home repossessions set to rise

  1. avatar Lesley Williams says:

    Repossessions are rising, because the Government has little or no intention of delivering some measures to help increase confidence in the workplace! With limited choices of work for young as well as some older members of the workforce, it is no wonder that the crisis is worsening. The minimum wage is below the national poverty line in terms of value, and these are what are drivng employers to take advantage of cheap labour, whilst ignoring the fact, ‘that people have to live’! Utility,Petrol and Banks are largely to blame for the hiking of their prices, fees and the amount of repossessions may be likely to increase beyond what is envisaged, if it is anything to go by when we had similar mind sets in during the recession of 1990-1991 with 15% interest rates. This is the opposite where we have low rates, which lenders are still reluctant to give borrowers fair discounts for retention, and where banks are not lending so freely to business’s, therefore we get this reaction, ‘repossessions’. My advice would be, don’t worry, sit tight and get help the moment you feel you are no longer able to cope. Trouble is, we are a dignified culture, whose nature is to own their own castles, now we need to stop, think and get real! Don’t just take your keys back to the lenders, you are still at risk of having to pay for any shortfall, that’s if your house sells in this fragmented market? Provided you can keep your arrears below 3 months, you should be able to meet the lenders conditions. Also, you can make arrangements, or have your mortgage rearranged over a longer period, or consolidate your arrears, or go onto interest only payments. Speak to your lender, don’t be shy, you’ve always managed before, and made payments, now you need advice, help and are a person who may be able to get the situation under control. Its always difficult circumstances when jobs, and money is tight, because of the lack of work! Employers, stop this minimum wage of war on 21 – 45 year olds whose income is far below the average of many people that claim benefits! families are under a lot of pressure just to put a meal on the table and to get their bills paid, let alone contemplate have their home taken away… We need to look at the lenders to help people, whose situations have changed and this needs to be addressed, and not label people who are under this pressure by resorting to having their relationship with their lender end in a 21 or 28 day order for repossession of their home. Goverments could give more to our people through delivering, instead of the ‘austerity’ measures which are strangling society generally for those on the front line.

    • avatar Rob Slack says:

      @Lesley Williams:

      >>”The minimum wage is below the national poverty line in terms of value, and these are what are drivng employers to take advantage of cheap labour, ”

      That is incoherent.

      >>”Utility,Petrol and Banks are largely to blame for the hiking of their prices,”

      Don’t their costs rise? Crude oil? Gas?

      >>”Employers, stop this minimum wage of war on 21 – 45 year olds”…

      Yes, employers, increase your costs so you have to raise prices….inflation, just what we want.

      “Goverments could give more to our people through delivering”…To give to some,governments MUST take from others. From whom?

      • avatar Mike says:

        The goverment to take benefits to all British able to work and sent them to work and not complaining some foreiners pinch their jobs.

        • avatar Leo says:

          Mike you got proved to be wrong by Rob. Yet you blame foreigners for most English people living beyond their means. Wake up Mike, we live in a Global Market now, people have to go where the jobs are and justify their worth. It a fact of life nobody is guaranteed anything, i think we are all being encouraged to work for things with this current government. Personally i believe this encourages creativity and can be good for the long term future of the British Economy.

    • I like many others are trying to gain an understanding of the financial difficulties our Country is in? We are not alone, and the following depicts why we are all suffering now:-
      A global recession is a period of global economic slowdown. The International Monetary Fund (IMF) takes many factors into account when defining a global recession, but it states that global economic growth of 3 percent or less is “equivalent to a global recession”.[1][2] By this measure, four periods since 1985 qualify: 1990–1993, 1998, 2001–2002 and 2008–2009.

      With this in mind, its no wonder the UK is feeling this downward spiral. The chances of getting confidence, is to get growth back. This is the aim of most of the financial institutions who have sucked the life blood from the economy, and we are supposed to trust this behaviour? Globally, all markets have been affected, and economies slowed, see following:-
      Jump to: navigation, search

      The TED spread (in red) increased significantly during the financial crisis, reflecting an increase in perceived credit risk.
      World map showing real GDP growth rates for 2009. (Countries in brown were in recession.)2007–2012 global financial crisis
      Major dimensions[show]2000s energy crisis2008–2012 global recessionAutomotive industry crisis of 2008–2010Dodd–Frank Wall Street Reform and Consumer Protection ActEuropean sovereign-debt crisisFinancial Crisis Inquiry CommissionSubprime crisis impact timelineSubprime mortgage crisisUnited States housing bubbleUnited States housing market correction
      Countries[show]BelgiumGreeceHungaryIcelandIrelandLatviaRussiaSpainUkraine
      Causes[show]Causes of the 2007–2012 global financial crisisCauses of the 2008–2012 global recessionCauses of the United States housing bubbleCredit rating agencies and the subprime crisisGovernment policies and the subprime mortgage crisis
      Summits[show]34th G8 summit (July 2008)2008 G-20 Washington summit (November 2008)APEC Peru 2008 (November 2008)2009 G-20 London Summit (April 2009)
      Government legislation and spending[show]Banking (Special Provisions) Act 2008Economic Stimulus Act of 2008Emergency Economic Stabilization Act of 2008Housing and Economic Recovery Act of 2008Term Asset-Backed Securities Loan FacilityTroubled Asset Relief Program (TARP)2008 European Union stimulus plan2008 United Kingdom bank rescue packageChinese economic stimulus programChina–Japan–South Korea trilateral summitAnglo Irish Bank Corporation Act 2009American Recovery and Reinvestment Act of 2009Green New Deal2008–2009 Keynesian resurgenceEmergency Economic Stabilization Act of 2008Economic Stimulus Act of 2008American Recovery and Reinvestment Act of 2009Federal Reserve responses to the subprime crisisGovernment intervention during the subprime mortgage crisisNational fiscal policy response to the late 2000s recessionRegulatory responses to the subprime crisisSubprime mortgage crisis solutions debate
      Company bailouts[show]List of banks acquired or bankrupted during the 2007–2012 global financial crisisGeneral MotorsChrysler
      v ·t ·e

      The 2007–2012 global financial crisis, also known as the Global Financial Crisis and 2008 financial crisis, is considered by many economists to be the worst financial crisis since the Great Depression of the 1930s.[1] It resulted in the threat of total collapse from large financial institutions, the bailout of banks by national governments, and downturns in stock markets around the world. In many areas, the housing market also suffered, resulting in evictions, foreclosures and prolonged unemployment. The crisis played a significant role in the failure of key businesses, declines in consumer wealth estimated in trillions of US dollars, and a downturn in economic activity leading to the 2008–2012 global recession and contributing to the European sovereign-debt crisis.[2][3] The active phase of the crisis, which manifested as a liquidity crisis, can be dated from August 7, 2007 when BNP Paribas terminated withdrawals from three hedge funds citing “a complete evaporation of liquidity

      If you think that its just governments that leave these legacies to the next government, then think again! We all have a responsibility to pay our way in life, least this is what we are taught, and to reward good behaviour and results. We’ve got it wrong by rewarding those who have laughed in the faces of the people who input their fair share to society generally, only to be on the receiving end of the ‘cuts’ being made right now. We recently had the Olympics, we are told that we need to use the Lottery funds to improve skills in future generations to learn sport competitively, then the schools playing fields are being sold off like no tomorrow:- Keep The Flame Alive: Over 70,000 want more protections on playing fields
      Tens of thousands of people are urging Michael Gove to strengthen protections for school playing fields to capitalise on the sporting success at the Olympics.

      Michael Gove disclosed earlier this month that his department had approved the disposal of 21 school playing fields ‘since May 2010’. But the figure is 30

      The question is could we get more money to help the economy or getting people confidence by finding them placements to learn new skills, and this Lottery Funding could help with this instead which is what we currently need. Lotto winners who won £148m recently must feel that this amount of money is obscene. We need money to survive, and rewards when we have earnt them, but on this scale, it is not normal, or just, its the world gone crazy! We could cap the winnings to 1m and the remaining amounts which accrue we could I’m sure, put this to better use of finding people a real sence of worth, and giving confidence to them to be able to forge ahead. Any shortfalls on cheap labour, ask the Lotto! Rob Slacks reply that it is incoherent that the National Minimum Wage is acceptable, beggers belief? Can you say you can live on this comfortably with your current commitments? No is the answer, so don’t be ridiculous. Prices increas in energy sources, yes, we have all heard also, that while stocks are being stockpiled, then sold to us at higher prices when they could have been lower at any given point, then, this is a way of saying, their prices rise, you’re going to pay for it!”! with your life! Come on, the profit to wholesalers is compounded by the duties taken in revenue, and employers, their costs are only increased because as you say, ‘don’t their costs rise’? – well, we used to pay £54K per year for premises, rates and v.a.t, these costs were ever increasing, as well as bank charges and accountants fees, who create excess burdens on small business’s to deal with high volumes of admin for the collection of their charges…. What control does an employer have over that? None! We employed 9 people at one time, and had a belly full of the rhetoric after 7 yrs. Turning over money and slaving away to give £54k up, just like that! The revenues, banks and any inflationary pressures are ones which are usually presented, whether you like it or not? No choice in other words, but to keep the minimum wage this low without thorough review and regard for living standards is woeful. We are not living in the dark ages now, and people are more educated if they are lucky to have had a good stable environment to grow in, lets face it, now its all the chat, web and email and facilities are there to access things of interest. We need to use the Lotto to help with this too, get thinking, if the Lotto were to give up its millions to those in ‘need’ we could see something useful being done. Funds to sponsor other projects by the lotto have been welcomed, just extend its uses to include ‘people’ who need the help to get back to feeling good again. Work means that mortgages can be paid for, and food, petrol and so the world goes round and round! Lets hope the governments listing to individuals at vote time remember to ‘stop and look and listen’, its that simple! Global economies not just previous governments are to blame for the crisis,,, greedy and wreckless lenders and banks who celebrate by showing their grattitude should now sink, and feel shame!

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  3. avatar john roberts says:

    governments have took for twenty years of boom.crude and gas prices down consumer prices up -FACT!
    banks are destroying the working classes,they have now put up mortgages regardless of base rate.
    lets be honest ,the government and last government and next government will do the job of a british government, SCREW THE WORKERS, MAKE THE RICH RICHER, AND KEEP THE STATUS QUO OF THE RICH MAN DRIVES AND THE POOR MAN WALKS THAT HAS ALWAYS BEEN ENGLAND.
    NEXT PRIORITY MAKE SURE ENGLAND AND ENGLAND ALONE PAYS MORE PER HEAD- FACT THAN SCOTLAND AND WALES AND ACTUALLY TAKES LESS PER HEAD- FACT.LETS FACE IT WE HAVE ALWAYS HAD A BAD DEAL REGARDLESS.WE GIVE TO ALL BUT OUR OWN, WE HAVE HAD NO REAL LEADERSHIP SINCE MARGARET THATCHER,SHE MAY HAVE ULTIMATELY SH*T ON THE WORKING MAN BUT SHE UNLIKE BLAIR DID IT TO YOUR FACE AND DID NOT LIE.

  4. avatar Chris Longley says:

    The banking system is still not fit for purpose. I have never known a period with such turmoil in the industry. The biggest cause of this is the mix of retail and international banking and using high street balance sheet to fund risky international banking.
    We have .5% interest rates but 6% mortgages. But we have savings accounts at low rates as well. The market has never been so back to front.
    Most of the debt they now have wasn`t caused by overlending to UK house holders that is for sure. Yes, many people have over extended with the credit thrown at them with low borrowing costs the banks could access in previous years. Those that were reckless are paying the cost of that, rightly so. Clearly, some thought must be given to home owners who have lost jobs and income and are under the threat of repossession.
    Austerity is causing problems as we have no growth. High debts do not automatically relate to low growth. Its the investment and confidence which is not being served well.
    We can only look to this government for not being able enough to put forward growth ideas and the last government for aiding and abetting the mess in the first place. We have the bankers regulating the bankers, the water industry regulating the water industry and so on. You cannot expect consumer concerns to be addressed under these regimes.
    Most of the housing cost problems are due to over inflated prices that arent affordable under stricter lending policies now in place. Earnings ratios were previously widely ignored and are now playing a bigger part as they used to. Those with equity have the best deals and affordability.

    I also fail to see how Mervyn King has kept his job. He has been BoE governor since 1997 and despite IMF warnings over the property market, the sub prime market to which many UK banks were exposed, Libor scandal and the bankruptcy of the high street banks, he still keeps his job. To believe a man in such a position doesnt know the dealings of the banking systems is not credible. His job is directly accountable to the financial stability of the economy.

  5. avatar M Brooks says:

    Where can I obtain a list of repossed properties?

    • avatar Nicola Severn says:

      Hi there, thanks for your question. It is actually illegal in the UK to ‘advertise’ repossed properties. However you will generally find many repossed properties are advertised as ‘chain-free’ properties. Also lots of reposses properties go to auction. Visit propertywide.co.uk and filter your propety search by ‘chain free professional’ alternatively visit our auction pages under the buy section.
      thanks

      • avatar M Brown says:

        Nicola

        It’s not ‘illegal’ to advertise repossessed properties just not considered the done thing by Lenders. You may remember the American auction house REDC who blatantly advertised repossession sales on national TV and presss advertising.

    • avatar Adi says:

      Nicola, how long has it been illegal to advertise reposessed properties. I saw them a couple of years ago being advertised ?

      • avatar Nicola Severn says:

        Appologies. It isn’t actually illeagal to advertise properties as “repossessed” however, the decision not to do so is based on Treating Customers Fairly obligations which are driven by the FSA.

  6. avatar gian giuliani says:

    Everybody I know that wants to work and has a job has their head above water, some more than others. When interest rates reached 15% or so I made it my priority to pay off my mortgage through hard work and long hours. I have since moved three times and bought and sold over 30 houses. I’m not done yet! If somebody realy want something I suggest they work for it, alternatively buy a winning lottery ticket!

    • avatar Jennie Webb says:

      How dare you imply this! I have 3 children under the age of 7, I work 2 jobs and my husband works over 60 hours a week, yet we still struggle. We don’t go on holiday, we rarely take the kids out and we don’t spend on unnecessary equipment such as sky. But this doesn’t help when trying to pay the mortgage or feed the kids.
      I am not moaning as I am luckier than some, but please do not think that everyone is lazy because that is utter non-sense.