Thursday, Jan 25, 2007
Home-grab danger highest in London
This is Money: Home-grab danger highest in London
Repossessions in London are at the highest for more than a decade as house prices soar and interest rates go up.
Posted by p. o. o. r @ 11:39 AM (293 views) Add Comment
13 Comments
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1. p. o. o. r said...
"County courts in the capital issued 6282 repossession orders in the first nine months of 2006 - up 30% on 2005 - leaving London on target for the most homes grabbed back by lenders in any year since 1995."
Interest rates did not start to go up until August 06, so this 30% increase on 2005 does not allow for the additional .75% that has been added to interest rates. I guess it takes 6 - 12 months in arrears before the mortgage companies take action - which says to me that in the second half of this year the increase in repos is going to be huge. Assuming it grows by only another 30% for 2007 - That will push it over the 10,000 homes just in London...
2. millard said...
Nice little graph to click on, you can see the lag between "Actions started" and properties repo'd.
3. inbreda said...
I'd be very interested to see the graph showing the proportions of BTL / non-BTL. I reckon they make up a huge chunk this time round.
4. sold 2 rent 1 said...
millard,
The lag on the graph indicates that we are in the same position as late 1989
5. p. o. o. r said...
Good observation s2r1 - I bought my first house in 1989 - Big Mistake.... 5 years of Neg equity - 5 years of Mortgage payments about 3 job redundancies between 1990 & 1993. Struggling to pay the bills, and keep the bailiffs away. I only had a mortgage then of £38K. On the same earning to mortgage ratio as back then I would have a mortgage of just short of 150K today - thank god I'm renting at the moment. Interestingly the house I bought in 1989 sold six months ago for 3 times what I paid for it. I know at least two people who lived in my road in 1989 who had there houses repo'd - well actually one guy just walked into the bank and handed in his house keys, and then vanished overseas somewhere, I remember him telling me that he was OK providing they didn't catch up with him within 7 years - not sure if this is true, and haven't been in touch since so don't know if the bank did catch up with him.
6. Sam said...
I think it's less likely to be Btl'ers making up a chunk of these repo's I know a few of them, they seem to be resilient little cockroaches at the moment. More pissed off that the increase in rates is stopping them from buying yet another property rather than reducing their current profitability.
Anyone fancy getting out a video camera and making a series on YouTube? - I'm thinking of making a few spoofs of, Repossession, Repossession, Repossession.
7. millard said...
Inbreda, I do hope so, I blame them for much of the speculation that has driven the market to this dizzy height, unfortunatley it will also be FTB's that get hurt, which many of my friends are.
8. dohousescrashinthewoods said...
I know of a couple of people who are suffering, but I take heart from the Firstrung comments posted today, comparing the hikes hitting an average BTL vs the hikes hitting an average FTB. BTL is clearly in more danger if they hit a void and the courts are likely to be less lenient with an investor's assets than a person's home.
Also, lower yields mean less opportunity to save to cover voids - and presumably the much maligned "orange b*tches" have been busy spending it on the new Mercedes.
9. talking rot said...
I wonder whether the "ripple effect" will continue? How long before we see similar rates of repos in the shires?
10. enuii said...
Repos are already up in my shire (cheshire) where my local friendly court officer informs me that it is now taking twice as long to serve repossesion orders than last year due to the increase. The figures are also similar for voluntary insolvencies, but then again they are actively being promoted as an 'easy get out' from existing debt for feckless borrowers.
11. Loosedemon said...
More repos mean more opportunities for FTB and BTL! The morgagees are only looking to recover their costs at auction.
12. Boarder said...
If the economy takes a downturn and all those renting Polish people leave (sob the women were mostly foxes) then there's another BTL problem.
13. sold 2 rent 1 said...
Loosedemon,
Don't be tempted in unless the property offers excellent discount.