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Repossession Statistics

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Controversial topic. Do not read if you are of a nervous disposition.

What makes a crash? Forced sellers coming onto the market, undercutting market prices at reposession auctions. Sorry, I mean defining a new market level ;)

So just how many do we need?

From the ONS:

Warrants executed, Warrants issued (thousands)

1989 30 65

1990 42 103

1991 61 134

1992 62 124

1993 51 126

1994 50 116

1995 51 117

1996 49 111

1997 50 116

1998 60 130

The total number of households in the UK is 24.5 million (2001 census -- ok, it's not 1989 but its gonna have gone up since then)

Let's take 1989 thru 1995 inclusive as the 'crash' years, coz of what prices did then.

Total warrants executed = 347,000

Some maths: 347000 / 24.5million = 0.0141 = 1.4%

So, it only took 1.4% of the households in the UK to go belly-up to crash the market! AND that's over seven years!


EDIT: Didn't count the number of years properly (ahem). Sorry folks.

Edited by megaflop

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That is the point - Repossessions are not a necessary ingredient for price falls - they never have been! (too small in number) - they are a function of one of the effects/causes of HPI - namely over indebtedness/leverage - yes often due to personal circumstances having changed (eg unemployment etc) but a function nonetheless.

Repos are a SIGNAL that things have reached excess or unmanageable proportions. The market falls for its own reasons. We should be worried (pleased?) that the signal has arrived earlier than anticipated. They are a valediction that things went wrong - in 1989 repos were low but rising somewhat from previous lows. That was the signal.

The recent flurry of unemployment data over the last 6 months will not have fed into these figures yet by a long chalk - wait until that happens. I think we will see 100% increase in repo orders by next summer.

Edited by Tempest

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