Wednesday 1 July 2009

Second wave of repossession coming

Amid talk of hope and stability came a little dose of reality yesterday.

Official figures showing the number of people in arrears on their mortgage and repossessions are apparently dropping.

But housing experts reminded MPs on the Treasury Select Committee that the figures are still at their highest level since 1991.

Dominic Lindley of Which actually said arrears were rising right now and that official figures were misleading.

Meanwhile Kay Boycott of Shelter warned there was a second wave of repossessions coming in 2010.

The first factor was that interest rates are low and are keeping arrears down – when they inevitably rise they will send mortgage payments beyond people’s means.

Market conditions and rising unemployment count – for every 10% in sustained unemployment, she said, you get 30% in increase in arrears.

Finally – the mortgage rescue schemes that are in place are time limited, they start to run out at the end of next year.

Without the extra support, she said, the people who would have had their houses repossessed or gone into arrears may do anyway – leading to the second wave.

Which begs the question – if we were only prolonging the inevitable was it worth it?


Trident said...

I fear that the financial hardships we have seen to date will pale compared to what is to come...

Watch the implosion of capitalism? I am a spectator torn between concern for my innocent fellow subjects and overwhelming schadenfreude as politicians, bankers, economists and journalists increasingly bear more than a passing resemblance to headless chickens.

chris southern said...

@polaris, it's not capitalism that has caused all of the mess since the start of last centuray, it's politicians meddling in business matters often benefiting people that have financial ties to them.
That is called corperatism, capitalism is you using your wealth and skills to earn more wealth within the market. Corperatism is where bussines and goverments get together to change the market via regulation change to suit themselves over competition.
How do you think the finacial bubble was caused? it was a change in goverment regulations that allowed the chaos and wealth transfer that we see (and it was breweing for longer than 1997-today)
The housing bubble was created by goverment intervention within the market, why? because of the tax income the treasury was recieving from it.

Big goverments are the problem, if they keep their noses out, only stepping in when peoples rights/freedom/safety is being abused them we will have a far better system.

Sell House Fast said...

Unemplyment has not peaked yet. As the rate of unemployed increases this could effect repossessions. Also the speed of recovery will still have an impact on repossessions. If people remain out of work for long periods of time after interest rates rise they will not be able to keep up with mortgage payments.

Post a Comment