In a continuation of the positive figures to come out of the housing industry of late, Northern Ireland has posted some good results with a fall in repossessed homes over the second quarter of the year. The Northern Ireland Courts Service said 929 writs were issued between April and June 2010 compared to 954 for the same quarter in 2009.
FIgures looked good quarter on quarter as well with repossession orders down from 1,088 in the first 3 months to 704 in the second quarter of the year. Not everyone’s convinced though, Lucy Cochrane, information and policy officer for Citizens Advice, said her team dealt with over £5.5m in mortgage arrears in 2009-2010 and reaffirmed the fact there is still a large number of people facing repossession.
New Ministry of Justice (MOJ) figures released show that courts in England and Wales made 29% fewer mortgage repossession orders between April and June this year than over the same period in 2009. As a result the number of repossessed houses dropped as well as the CML forecast for the remainder of the year.
There were 13,389 orders for home repossession, down from 18,813 a year ago, but with 46% of the orders being suspended, the actual number of properties repossessed is likely to be lower. In the first quarter of 2010, 9,800 properties were actually repossessed, lower than expected due to low interest rates and an absence of a massive unemployment surge.
Property fund company Residential Property Solutions (RPS) has come out and claimed the Council of Mortgage Lenders (CML) have underestimated the number of house repossession numbers in the UK throughout 2010. As we recently documented, the CML lowered its forecasts earlier this month from 53,000 to 39,000 but managing director of Residential Property Solutions, Pete Thomson, claimed the CML’s downgraded figures are not correct.
Speaking to the FT, he said: “Citizens Advice has reported that 25,360 people sought its advice between April and June this year regarding mortgage payment problems and has said that it believes the numbers can only escalate. Speaking about the forecast for 2011, Bernard Clarke, communications manager at the CML, said the outlook was uncertain.
Throughout the recession, the Government made available several financial measures for home owners who lost their jobs but now, with the economy picking up, some of this support is being reduced. One such payment is Support for Mortgage Interest, which is paid to those on income-related benefits and is being cut by 2.3%.
Support for Mortgage Interest is paid in full every month regardless of how much a borrower actually pays on to their lender. It is this potential loophole that has prompted the Government to announce that it is cutting back the support to the average BoE rate of just 3.75 per cent from October 1. The cut will leave those who rely on it up to £202 worse off a month and has been blasted by charities as a move that will increase repossession order notices across the UK.
Some news from across the pond now that could well have a ripple effect throughout the UK… Banks in the US repossessed the second highest monthly number of homes ever last month and the number of home owners facing foreclosure rose as an unappetising job market prevented them from making payments.
Real estate data company RealtyTrac reckon around 1 million homes will be repossessed across the US this year with lenders taking 92,858 properties in July alone, to put that in context: 92,000 is more than double the amount forecast in the UK over an entire year. Ultimately, it’s not looking good over there which means the number of repossession order notices over here could be going up. Watch this space.
Good news: The number of house repossession orders in the UK has fallen, from 9,800 cases in the first quarter of the financial year to 9,400 in the second. Compare that second figure to the 11,800 repossessions recorded in the same period last year and you can see we’re going in the right direction. The figures encouraged the CML to reduce their estimated number of repossessions for 2010 from 53,000 to 39,000.
Now for the Very Bad News: Only last week we had a powerful reminder of the damage repossession can do to a family, if you missed the reports, we’re talking about Barry and Amanda Harrison whose house in Coventry was repossessed last year. After both losing their jobs, debt and depression took over and culminated in Mr Harrison apparently taking his own life after killing his wife. The death of the pair leaves their 3 children, Aiden, five, and Owen, three, orphaned.
Now, we’re under no illusion, this is an extreme sequence of events and has to do with more than repossession but it does add fuel to the aguement that lenders do not do enough to help struggling people. The issue is especially difficult to comprehend when you consider that the lender that repossessed the Harrison’s home went on to sell it almost certainly at a loss, according to Land Registry figures.
Now we’d all go to any lengths to protect what we hold dear, whether it’s our family, friends, pets, car or house there’s a dedication to keeping the things we love, safe. So, when a Co Wicklow man received a repossession order notice, he decided to barricade himself in his family home and launch a lengthy stand-off with officials who were trying to repossess his property. Perfectly Normal.
The man in question is Plant Hire company owner Dermot Ivers and his chosen industry came in very handy when needing to erect a sturdy barricade. Mr Ivers used his own machinery to bulldoze a front wall at the semi-detached house and then placed a digger, tractor unit and numerous vans in the garden to keep the repo man out. The stand-off continues.
Housing benefit cuts are to have an ill effect on almost one million home owners according to the TUC general secretary, Brendan Barber. In an official statement last week he said: “This cut in housing benefits will make a real difference to some of our poorest and most vulnerable families. Families in London will find themselves out of pocket to an average of £1144 a year, and households all over the UK will be left much worse off.”
It’s not just the Capital either, households across the UK are set to lose around £12 a week on average, which equates to around £624 a year. With money being super tight right now, taking over £600 of struggling home owners can only take them one step closer to house repossession or at the very least, missed mortgage repayments.
Figures released recently have revealed that over 1,800 properties were repossessed in Northern Ireland in the last year, with more than 80,000 homes and around 19,000 business failing to meet their mortgage repayments over the financial year. With such a large number of defaults came a record breaking level of outstanding mortgage payments totalling £157 million by the end of March 2010.
Almost £100 million of the outstanding amount was owed by businesses alone and over the same period, 3,658 repossession order notices were issued according to the NI Court Service. Repossession didn’t occur in all the cases, but almost half of the property owners involved, 1,804, had to hand over their keys and were evicted.
The Housing minister, Grant Shapps, has released the details of a secret report that was commissioned last year by the Department for Communities and Local Government. It was a Labour led report that was compiled by academics at Oxford University and kept hidden from public eye.
The report was put in place to predict repossession order numbers in 2012 and it made shocking reading according to Mr Shapps. It warned that the number of repossessions could spiral to 175,000 in 2012, which equates to 480 every day and is 100,000 more than during the peak of the last recession in 1991. The latest predictions on the number of repossessions in 2012 suggest the true figure will be closer to 55,000.
