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cashinmattress

Thousands Of Scots Face Losing Their Home This Summer

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http://business.scotsman.com/business/Thousands-of-Scots-face-losing.6766041.jp

Thousands of Scots face losing their home this summer

Scotland faces a surge in repossessions this summer as thousands of cases put on the back burner last year finally go before the courts.

The pressure will be exacerbated by rising unemployment and the impact of the government's spending cuts, with low interest rates all that prevents thousands of households from falling into arrears.

It is rumoured that the number of Scottish repossession cases set to be raised over the summer months by two large lenders alone could hit the 700 mark. The spike is due to the implications of a court case that concluded last year and led to up to 5,000 repossession cases before the courts in Scotland being withdrawn.

The Royal Bank of Scotland vs. Wilson case followed the bank's attempt to recover thousands of pounds owed by brothers Francis and John Wilson, who live with their wives next door to each other in Edinburgh. RBS sought to repossess their home in 1998, but it failed to issue a "calling-up notice" that would have given the brothers two months to pay off their debts.

The Court of Session in Edinburgh found in the bank's favour, but the brothers then appealed to the Supreme Court. They secured victory last November when the judges ruled that all lenders must issue a calling-up notice before initiating repossession proceedings.

However, standard practice in Scotland meant that lenders, including RBS, have historically raised repossession proceedings without using a default or calling-up notice.

So the ruling meant any ongoing cases had to be dismissed and then re-started so that they complied with the legal process. Experts predicted at the time that cases would be delayed by up to six months. Now, many of those cases are ready to hit the courts.

And the Council of Mortgage Lenders (CML) believes there are another 15,000 cases where lenders have secured a decree but not enforced it while the owner was able to keep to the payment arrangements. The decrees are no longer valid, following the Supreme Court's ruling, so those cases may also need fresh court actions.

Shelter Scotland, the homeless and homelessness charity, is consequently gearing up for a surge in repossession cases and a subsequent spike in demand for its services.

Eleanor Hamilton, principal solicitor for Shelter Scotland, said the main worry was that the Scottish legal service might be overwhelmed in the short term.

"Our concern is the considerable pressure this will put on legal services and, particularly, whether or not there are going to be enough solicitors or lay representatives available or willing to represent in court the high numbers of people facing repossession.

"If there are not enough, this could lead to an increase in people having to represent themselves in court or not turning up simply because they can't access lay representation, legal aid or afford to pay for representation. In those cases, it is more likely they will lose their home."

The impact of the cases backlog is likely to be exacerbated by a more natural rise in repossessions, with rising unemployment and the government's spending cuts driving more people into arrears. The spending cuts include last October's halving of the level support for mortgage interest, which is designed to cover interest payments for those in financial difficulties who have been out of work for at least 13 weeks and are claiming benefits.

There are also concerns that the forebearance of lenders, which were urged by the government in April 2009 to take a more conciliatory approach to those in arrears, could be masking the true extent of potential repossession cases.

Repossession levels fell in 2010, but the CML has predicted an increase of 11 per cent this year. In its annual report, published last month, the CML said it was not confident that arrears and repossessions would be countered to the extent seen in 2010.

"The outlook for economic recovery remains weak, and planned cuts in government spending, tax increases, higher inflation and the prospect of rising interest rates are all likely to bear down on borrowers' finances," it said.

"Additionally, the government has cut directly support for borrowers."

And Mike Dailly, principal solicitor at Govan Law Centre, believes that in Scotland, the CML's prediction of an 11 per cent spike could prove optimistic.

The Govan Law Centre (GLC) has called on the Scottish Government to extend its homeowner support fund and reform the rules around the mortgage-to-rent scheme to help the country ease the growing pressure on homeowners.

Dailly said the rules were too restrictive, pointing out that half of those applying for support in the year to 31 August, 2010, were rejected.

"Clearly, the scheme is unable to cope with the current demand, never mind the expected significant increase in demand which GLC predicts later this year," he stated.

Dailly also wants new rules to be introduced in Scotland allowing those having their homes repossessed to rent them back from the lender until the properties are sold. He acknowledged that lenders would be very reluctant to do this as it would require granting a short-assured tenancy for at least six months.

"However, we know that many properties can take several months or considerably longer to be sold and it would benefit lenders, repossessed occupiers and local authority homelessness departments if former owners could enter into a simple 'no frills' tenancy until the property was sold," he said.

It's not better up here. Just the same as everywhere else outside of parts of London.

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Hopefully this will start an avalanche of crashes cascading down from the top of the UK.

Having recently seen legions of empty new builds in Scotland I can only rub my hands with glee at what a huge wave of repossessions will do to the Scottish property market, and hopefully in turn the rest of the UK's property market :)

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Hopefully this will start an avalanche of crashes cascading down from the top of the UK.

Having recently seen legions of empty new builds in Scotland I can only rub my hands with glee at what a huge wave of repossessions will do to the Scottish property market, and hopefully in turn the rest of the UK's property market :)

Problem is that most of the repos will be coming from skiddy areas, and people will sure enough trash any property before the baliff comes.

The only thing that will remain is the debt, and that will be paid off by you, me and the rest of the nation, until such time as we start hanging bankers and politicians.

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Scotland is WAY over-priced...

Sure is in some areas, especially considering the average wages up here are probably in the region of £20k, not the 30-ish reported by gubmint.

Add to the fact that you have huge swathes of geography where nobody has a job, especially on the west coast.

EDIT: I think it is fair to say that Scots, of which I am one, are generally as deluded about the value of a property as anyone else in the UK.

Edited by cashinmattress

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http://business.scotsman.com/business/Thousands-of-Scots-face-losing.6766041.jp

It's not better up here. Just the same as everywhere else outside of parts of London.

It really is a different country, with its own legal system that often is more logical than the English system.

Nevertheless eventually those that can't pay their mortgage should be evicted.

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Problem is that most of the repos will be coming from skiddy areas, and people will sure enough trash any property before the baliff comes.

The only thing that will remain is the debt, and that will be paid off by you, me and the rest of the nation, until such time as we start hanging bankers and politicians.

I'm sure there are plenty of the over-leveraged in decent areas too. However, what you say about the debt is true. It is when inflation continues to bite harder and taxes continue to go up to pay the debt that people will finally wake up.

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I'm sure there are plenty of the over-leveraged in decent areas too. However, what you say about the debt is true. It is when inflation continues to bite harder and taxes continue to go up to pay the debt that people will finally wake up.

yup, seems like a crashtastic winter in prospect.

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Don't worry I'm sure Alex Salmond will promise every Scot a free house, whilst expecting the English taxpayer to pickup the tab.

North Sea oil can pay for it all apparently.

Or Salmond can just declare all repossessions and illegal act and a sign of English aggression.

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  • 311 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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