Tuesday, Sep 15, 2009
Keepin' the bubble inflated ... but for how long?
Metro: Repossessions fall 9% this quarter
"A total of 13,610 properties were repossessed during the three months to the end of June, nearly 1,300 fewer than during the previous quarter but still 23% higher than for the same period of 2008, according to the Financial Services Authority. The FSA said the fall in repossessions was likely to be due to the introduction of the pre-action protocol in November last year, under which courts can only grant a repossession order if all other measures to keep someone in their home have failed. The Government has also launched a raft of initiatives to help people who are struggling with their mortgage, while lenders are showing greater forbearance and low interest rates are helping to keep repayments more affordable."
Posted by mark wadsworth @ 03:45 PM (1518 views) Add Comment
19 Comments
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1. Smiling123 said...
get in there!!!
2. will said...
'pre-action protocol' - I wonder if this is in the public domain. Has anyone seen the small print?
3. alan said...
Will,
The BBC examined the usefulness of repossession response methods, recently. They have been bedding in over the last 6 months or more.
http://news.bbc.co.uk/1/hi/business/8197387.stm
A lot of families seem to have contacted this service. I've not personally been involved with it.
4. jackas said...
tick
tock
5. bellwether said...
There should be far more repos than this, but guess what, repos might not happen, and without them any correction will be incredibly slow as your tax pounds are bailing out defaulters
EG the state will pay the interest (and in some cases the capital) on the mortgage of someone who becomes unemployed and has a mortgage of < £200,000. This sweet if you can get it relief runs for 2 years at present but I'm sure that will be extended to keep house prices up.
Also it is now officially more difficult for repossesions to happen with creditors having to first offer the homeowner all sorts of things like payment holidays and payment reductions.
Keep working guys, keep saving and keep house prices out of your reach.
It is repos we need to correct the market and they are not happening and it looks as if they aren't going to be happening
6. mrflibble said...
@5. bellwether
Keep working guys, keep saving and keep house prices out of your reach.
Cheers man, I was already feeling like I'd had a good kicking from Merv today, now you pile in...
Let's see if this 'return to normal' can turn into fear & capitulation, if not then the jig is up and we loose...
7. will said...
No one in their right mind should give in to this. If we refuse to buy, then who will all those vendors sell to when they reach old age and need to downsize. I don't believe it is anyones interest to prevent prices from falling. All they can do is delay things a little longer. At some point the banks will need to release their 'hidden repossessions'.
8. phdinbubbles said...
ThisisMoney: Repossessions fall 10% despite job crunch
Despite the fall in actual repossessions over the second quarter, the Ministry of Justice reported an increase in the number of repossession claims made through the courts in England and Wales.
MoJ figures show a total of 26,419 claims were made up from 23,968 in the first quarter. But this is a fall of 32% from the the same period in 2008.
'We are now seeing personal insolvencies picking up steam as the myriad of consumers can no longer service their debt obligations,' said John Bangham, personal insolvency director at accountancy KPMG. 'With the highest unemployment figures recorded since 1995, the insolvency figures will only increase. Along with unsecured debt, it's likely that home repossessions will also continue to increase.'
The MoJ cautioned against reading too much into the increase as there was a significant fall in claims during the first quarter due to the introduction of the 'pre-action protocol'.
The protocol, which came into effect on 19 November last year, states that courts can only grant a repossession order if all alternative measures to keep people in their homes have failed.
After that date, there was a 50% fall in the daily and weekly number of new mortgage repossession claims, as homeowners sought alternative solutions - and this was reflected in first quarter figures.
They've just delayed the repo's for after the election imho.
9. phdinbubbles said...
Sorry, try this link if you want to read the thisismoney article.
10. phdinbubbles said...
Sorry for the spamming, but I quite liked a couple of the comments at the end of the thisismoney article:
"Graham, I suspect it *is* just a temporary fall. It is unsurprising that Q1 exceeded Q2, as many employment decisions are made at the turn of the year, so I don't think this is as 'good' news as they'd like us to beleive. Plus, there are reports out at the mo saying that many recently unemployed people's savings are drying up, so this will filter through slowly.
Finally, you can expect the worst jump in unemployment to lag about 6-9 months behind the worst drop in GDP (Q1 2009), making that Q3-Q4 2009, and for the worst jump in repo's to follow the latter by another 3-6 months so first half of next year could be the worst incidence of repo's."
and
Repossessions help the lender, they will never lose thousands. If they auction your house and it doesn't clear the mortgage they will pursue you to the ends of the earth for the shortfall.
Add to that if they do auction the house and it clears the mortgage, then they have got a high risk borrower of their books. In this risk adverse environment the banks would love that. Unfortunately the householder has lost any equity they might have had from a private house sale.
Also factor in that the longer they let people build up arrears then the greater the chance that the auction will not clear the mortgage. Hence if you slip three months behind then they want you out.
Arguably some of these schemes to delay repossession may actually be delaying the inevitable and leaving people worse off in the long run. Only time will tell.
11. phdinbubbles said...
Apologies again - that article was from a month ago - still valid though imho.
12. mark wadsworth said...
PhD, that is all good stuff.
So sum up, they've just slowed down the whole procedure from a [a couple of months] to [several months], thus leading to a large backlog that will hit the markets in half a year or a year's time.
13. Yoss said...
Historically low interest rates are a big factor..... When (Not IFf) rates do jump. The HPC really starts.
14. Jayk said...
As said here many times, it's just a spring bounce.
Wait a minute, isn't it Septe
15. wiltshire said...
As one mortgage holder grabs a life-belt another 2000 are thrown off the ship.
16. layers said...
Well for me this is the last straw, but does show that 'they' can do whatever is necessary to keep the good ship House Price floating. It matters not what reality and the stating of the bleedin' obvious events in the economy dictate a total collapse, because time, and time again something else keeps coming along to negate the imminent disaster. Could it be when the tories take over? Or a year after that, or 2 years.... Or could 'they' seriously keep this going for another 10 and we've all missed the next bubble - ala Eddie George in 2001?!
Maybe we should all be looking to find our plots of land to build our own places - at least that adds value. But then I don't know what land really costs.
Black is white, that's all I really know, and yes we're through the looking glass people.
17. paul said...
Kicking the problem into the long grass.
This is how the lost generation is created - the government trying to put the dampers on an unsustainable credit boom from righting itself.
Welcome to Tokyo on Thames - without the nice food. Or the money. Or the clever gadgets.
18. matt_the_hat said...
Gents your all talking as if repossessions aren't happening 52,000+ a year sounds like a large number to me!
19. phdinbubbles said...
16 matt_the_hat
I think the point being discussed is that the incidence of repo's isn't as high as the last crash and on the face of it appears to be falling.
The points I was trying to make were that 1. peak repo incidence lags unemployment incidence (which hasn't peaked yet) and 2. the dip in incidence brought about by the 'pre-action' protocol, and whatever other schemes there are, will just mean that a lot of the houses that would have been repo'd now will just be repo'd a few months further down the line - the same argument applies with low base rates- it just gives those in a distress a longer window in which they can make repayments from savings before they're in trouble.
Most voters have sympathy for people about to lose their homes, so it'a bit of a no-brainer for the government to appear to give them help and appear to give the nasty banks a kicking (and to also try to delay the inevitable crash until a more convenient time).