Repossessions went up 15% in the first quarter of this year.
Compared with the final quarter of last year, when 7,900 properties were possessed, 9,100 properties were possessed in the first three months of 2011.
However, the figure was 10% lower than the same period a year ago, and equal to the average quarterly number of repossessions throughout 2010.
The total number of mortgages in arrears also fell – but only very slightly. At the end of March, the number of mortgages with arrears equivalent to 2.5% or more of the outstanding balance showed an improvement to 166,900 (1.47% of all loans), compared with 170,000 (1.5% of all loans) at the end of December 2010.
The Council of Mortgage Lenders is currently forecasting 40,000 repossessions and 180,000 arrears cases of 2.5% or more by the end of this year.
However, the CML has acknowledged concerns expressed this week by the Financial Services Authority which says that lenders are hiding the true figures by their “excessive” forbearance of borrowers in arrears.
CML director general Michael Coogan admitted: “Too much forbearance may be as bad as too little.”
This week, the FSA accused lenders of hiding the true state of their mortgage books by using techniques such as extending the term of the mortgage, transferring it to interest-only, or ‘flexing’ the terms of the deal.
The FSA said that lenders were particularly likely to use excessive forebearance “in an environment of falling or stagnating housing collateral prices”.
A further warning also came from Michael Ossei, personal finance expert at uSwitch.com, who said: “This drop in arrears is not likely to last much longer as we are facing a perfect storm.”
He said that when stagnant salaries and rising costs, including energy, hit home, many households would be in “dire straits”.
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Comments
Nothing wrong with "Dire Straights" they were the Sultans of Swing ;-)
You've not even attempted to answer a question, yet you ask me 5!
You seriously do have too much time on your hands.
Nice one Ray,
Have a punt with your investment and take shares in St Trinity, should be a winner
Jonnie
Back from golf now - 35 points - won the money - how should I invest it - any ideas anyone?
Glad you are all still having fun - back next week - you all have a good weekend.
AoS - I'll answer your questions with questions if you don't mind.
1) How do YOU find the time to post on this site (I don't think Pee Bee's copyrighted the caps thing). Is the workload somewhat slower in your part of EA land? (I'm not going to answer your question here, so I'm not expecting you to answer this one).
2) Can you remind me of the figure I have given which I expect prices to fall by? (I'll answer that for you - nobody can, because I haven't given one).
3) Who are all these mysterious investors with lots of money? If they are smart, they read financial magazines which are telling them to get out of the UK property market. If they aren't smart, then they are already up to their eyes in debt. There's a lot of pent-up supply out there too!
4) Is the first poster on this thread warning about IR rises from HPC or an EA? (I'll answer that too, they're an EA).
5) If you think HPC therories are all scaremongering and not based in reality, why don't you post those thoughts over there with facts to back them up?
Five questions to your three there! That's inflation for you. And as for Anna, well, (adopts childlike voice and points finger) - she started it!
SBC re: inflation, you are correct, imported inflation mostly down to the yanks who are printing money at a ridiculous rate and could feasibly default this year ulnless congress raises the debt cap.
The debt on uk plc balance sheet is a lot higher now as a pc of gdp than it was in 2008-2009.
re-visit in 2012, good call.
1) Rant - do you have a job? If so, your boss would be going mad if he/she saw how often you posted.
2) This is purely a question. Let's say prices do crash to your desired levels. Do you think you will have the same selection of properties available that there are today?
3) Do you think the buying market will remain 'open', giving you a free-run of the market? Ie, the big boys (and William 'The Great' Hicks) won't jump in and burn the FTB out like termites. Not to mention the brand new breed of buyers who couldn't resist to buy a second property at these lovely jubbly prices - count me in, too :)
House prices up 10% annually where you are Anna? If so, then please feel free to ignore any comments posted by the EAs and HPCers here talking about falls.
its Friday why are loony HPC JW;s not out on the street boring others?
MT, possibly although 'x' amount of the UK's inflation is imported (which we have no control over) so i'm not entirely sure if that is deliberate policy.
Re: the bankrupting of the UK. As you know, house prices fell 20% over the course of 08/09; last time I checked there weren't bodies strewn all over the streets. Same goes for the 90s. That's just sensationalist rhetoric endorsed by the VIs who want to prevent a correction by any means.
In any event (as I said to PeeBee or perhaps Jonny? a few weeks ago) we can revisit this in a year's time and see who's closer to calling it right.
Breaking news - Q1 GDP growth in Greece was higher than in the UK. This should surprise me, but it doesn't. Our inflation rate at the moment is higher than Zimbabwe's too.
A HPC through stealth (ie in real but nominal terms) isn't going to break this country's addiction to house price inflation. Unless the public can be made aware of actual price declines, then we as a nation are lining ourselves up for another cycle of boom and bust in the not-too-distant future.
The inflation spike is a deliberate ploy to inflate away the debt. Wage inflation and economic growth although pathetic are higher than property price inflation, thus houses are becoming more affordable even if they remain at 0% per yer for next decade. Fact is the banks/authorities can move the goalposts to prevent housing crash by either printing even more money or extended loans, looks like they will do anything to avoid banks i.e the country defaulting which no doubt a house price crash will cause.
The Japanese govt has also managed to persuade the country's high-saving population to buy bonds of their own national debt. That wont work over here because on the whole UK people have lost the saving mentality and become addicted to cheap credit. In short, I believe our government is trying to bring about a Japanese style 'soft-landing' though. It's not a great model to follow - the Japanese economy is the same size it was 20 years and house prices still fell 70% ish anyway.
Monkey Tennis (re: Japanese lost decade parallel) maybe, maybe not. Remember though that (if I recall) Japan had low levels of household indebtedness. There's no reason why we wont see a repeat of 08/09 again. Of course, no-one knows, suffice it to say I hope you're wrong.
Regarding your point on Base Rate being held at 0.5%, so what? With CPI due to hit 5% this year and wage inflation still circa 2.2% people's ability to pay-down debt will be further eroded. Net result, HPC.
Let me spell it out for you; the UK is f*cked.
play!
In my view all the posters so far on this today should give up EA and go into politics. Me? I am off to paly golf!
'Extend and pretend' is the new order of the day as far as managing debt/high mortgages is concerned, extending the loan time is an option all banks will look at to stop the dam from bursting . IR's will stay at a record low for a long time yet, the economy here and the way the authorities are managing iti effectively copying the bust Japanese economy of the past 20 years. The hpc brigade will be very disppointed, they seem to think that it will mimic the early 90's crash but then there were a whole different set of circumstances, the country wasn't insolvent like it is today so could weather the storm.
AC - the Tories's hand was forced in the early 90s when they had to raise IRs to defend the Pound's value in the ERM. The resulting rapid crash in house prices and rise in repos saw them out of government for three terms. They haven't forgotten that and neither has the British public.
The decisions to avoid the situation this country is now in were all bypassed years ago. What was the BoE thinking a decade ago when it lowered IRs as house prices were showing double digit growth?
@ Sibley's B'stard Child
You are right and whilst I know that the best option is a short sharp shock correction, pick yourself back up and get on with it, I have a feeling that the problems with the Financial System are so bad that that is just not an option.
From what I can see the sub-prime crisis moved from just the banks to a sovereign debt crisis involving whole countries and the banks too.
If everyone owned up to how bad it REALLY is, the world would just go into meltdown.
The ConLib government looks like it is going for the soft option of slow house price decline and modest inflation that over the course of 5 years will deliver a real terms value reduction of 25-30% in house prices, but in a way that doesn't cause a slew of repossessions and a crash.
Quite clever, but takes a lot longer and means that "We are all in this together" so a lot of people who would be absolutely fine if prices crash because they either don't have a mortgage or have sensible equity levels end up "suffering" with those who were reckless.
Unfair, maybe, but a very Marxist way of looking at it all.
Who would have thunk that the Tories would be so nice?
SMI was first introduced at the beginning of 2009 and offered help to people for two years. 24 months later and, ta da, the number of repos jumps.
To be honest, it's surprising repo levels are so low given the disconnect between average salary and average house-prices.
Lenders will only repossess in the most extreme cases (I believe more than 12 months in arrears - I may stand corrected) because the FSA encourage lender forbearance. Then the FSA have the bloody cheek to castigate the lenders for 'storing-up trouble' for adhering to the 'treating customers fairly' remit.
Also worth mentioning that the are a number of props in place to stem the flow of arrears and repossessions - 0.5% base rate for two years now, Support for Mortgage Interest if made redundant, and lenders forbearance.
Yet despite all this, we're expecting 40,000 repos this year? That's just the tip of the iceberg.
Anonymous Coward, if anything has taught me since 2007 it's that successive govt's will cling to dear life the slow option at all costs.
I've been saying this for ages.
It's great that someone finally agrees with me.
Scary thought...
The MPC might actually raise interest rates and then all those people in arrears will be proper f**ked (I like the film Snatch - sorry!).
Then of course we end up with the 25% fall in prices that the HPCers want.
Sticking plaster - slow or fast?