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Wayward

Property repossessions 'lowest since 1980'

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https://www.bbc.co.uk/news/business-47239360

 

"The number of homes repossessed in the UK fell to its lowest level since 1980 last year, industry figures show.

There were 4,580 homes repossessed by mortgage lenders from owners who were unable to keep up with repayments on their home loans.

Low mortgage rates and a less aggressive attitude from lenders has meant low levels of repossession in recent years.

Mortgage arrears among homeowners have also been falling."

 

I just can't see meaningful price falls without distressed selling...?  I guess that comes from my recollection of the early 1990s.  Only good news here is the comment on BTL borrowing...

"there was a 7% rise in buy-to-let mortgage holders with significant levels of arrears, defined as 10% or more of the outstanding mortgage"

 

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43 minutes ago, Wayward said:

I just can't see meaningful price falls without distressed selling...? 

The number of repossessions in 2008 was not a great deal higher than the surrounding years, but prices still fell 15%.

As soon as people either

- Aren't lent any money, or

- Start to believe that prices will be lower next year

They just stop buying, and demand dries up.  That alone causes prices to collapse.  Obviously higher supply would have the same effect - but it isn't a pre-requisite.

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Least surprising news of the day... fits with the ongoing policy of ''support house prices and protect home owners at ALL costs''

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Well with the volume of sales being nowhere close to the one that used to happen back then, IR floored and generally going down, rather than up in that period of time, well the conclusion is that the comparison is some eye grabbing ********

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55 minutes ago, scottbeard said:

As soon as people either

- Aren't lent any money, or

- Start to believe that prices will be lower next year

I agree, though I think 1 is far more influential than 2. There are just too many people thinking buying at anytime is good time, as long as "it's for the long term". We will need another credit crunch to crash the market.

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6 hours ago, scottbeard said:

The number of repossessions in 2008 was not a great deal higher than the surrounding years, but prices still fell 15%.

As soon as people either

- Aren't lent any money, or

- Start to believe that prices will be lower next year

They just stop buying, and demand dries up.  That alone causes prices to collapse.  Obviously higher supply would have the same effect - but it isn't a pre-requisite.

15%.....I said meaningful price falls. We really need more than 15%...

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Simple answer here, it’s because home ownership was much higher then. As soon as a financial downturn hit, those struggling the most with money or finding jobs lost their homes.

Now the proportion of BTL landlords renting to housing benefit recipients have skewed the statistics as not as many lower paid workers own their own home (especially in the south) as house prices are so out of whack with pay.

Obviously when the debt tap is turned off in the next financial downturn (we are starting now), it’ll be the BTL landlords losing their homes and that statistic will jump up.

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20 hours ago, Wayward said:

I just can't see meaningful price falls without distressed selling...?  I guess that comes from my recollection of the early 1990s.  Only good news here is the comment on BTL borrowing...

There was a thread on this at the end of last year

During the late 80’s to early 90’s the market crashed and lenders did load of repossessions

They are very, very reluctant to repossess now and would rather restructure the mortgage or give a payment holiday to ensure the mortgagee keeps the property

The last thing a lending institution wants in a poor market is load of empty property that are going down in value and becoming derelict. That show very badly on the balance sheet. 

The lender does not have the staff or the desire to be involved in property maintenance and to be organising drain downs of heating systems, EPC’s, valuations, garden maintenance, the risk of vandalism, squatters and many other things which are time consuming. 

19 hours ago, nome said:

''support house prices and protect home owners at ALL costs''

The lenders are protecting themselves not the mortgagee

 

18 hours ago, peter_2008 said:

I agree, though I think 1 is far more influential than 2. There are just too many people thinking buying at anytime is good time, as long as "it's for the long term".

Agree - I have never bought a house as an investment it has always been a home 

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21 hours ago, Wayward said:

https://www.bbc.co.uk/news/business-47239360

 

"The number of homes repossessed in the UK fell to its lowest level since 1980 last year, industry figures show.

There were 4,580 homes repossessed by mortgage lenders from owners who were unable to keep up with repayments on their home loans.

Low mortgage rates and a less aggressive attitude from lenders has meant low levels of repossession in recent years.

Mortgage arrears among homeowners have also been falling."

 

I just can't see meaningful price falls without distressed selling...?  I guess that comes from my recollection of the early 1990s.  Only good news here is the comment on BTL borrowing...

"there was a 7% rise in buy-to-let mortgage holders with significant levels of arrears, defined as 10% or more of the outstanding mortgage"

 

I agree the housing market looking pretty strong at the moment.

Interestingly my sister works in finance and she's explained to me recently alot of people are in mortgage arrears. However she says they never aim to repossess, rather they just add the interest on monthly to the existing mortgage. For some this may cause them to loose several % from their equity. Can go on for years she said and as house prices keep going up their equity is going up.

She was also suggesting that the goverment have somewhat tied their hands with repossessions, she suggested they had to restructure the debt or even just hold onto the house, with the client in,  even if they are not paying.

She said for the bank overall repossessions were not a profitable overall as that drives down prices and other people start to default. 

So in other words the market is far from free it's not only HTB, its debt relief and it's as if the banks are acting as a council. 

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32 minutes ago, happyguy said:

There was a thread on this at the end of last year

During the late 80’s to early 90’s the market crashed and lenders did load of repossessions

They are very, very reluctant to repossess now and would rather restructure the mortgage or give a payment holiday to ensure the mortgagee keeps the property

The last thing a lending institution wants in a poor market is load of empty property that are going down in value and becoming derelict. That show very badly on the balance sheet. 

The lender does not have the staff or the desire to be involved in property maintenance and to be organising drain downs of heating systems, EPC’s, valuations, garden maintenance, the risk of vandalism, squatters and many other things which are time consuming. 

The lenders are protecting themselves not the mortgagee

 

Agree - I have never bought a house as an investment it has always been a home 

Agree

Im afraid we are in a very different world to the one we used to be in

Cheap interest rates seem to be part of life. The day that ends you won't want to buy a house, everything will collapse. 

Rather than wait for a crash start looking at the costs of long term fixed rate mortgages, then you will begin to see why things might not correct the way we all hoped they would. Then consider your options 

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4 minutes ago, Speed1987 said:

I agree the housing market looking pretty strong at the moment.

Interestingly my sister works in finance and she's explained to me recently alot of people are in mortgage arrears. However she says they never aim to repossess, rather they just add the interest on monthly to the existing mortgage. For some this may cause them to loose several % from their equity. Can go on for years she said and as house prices keep going up their equity is going up.

She was also suggesting that the goverment have somewhat tied their hands with repossessions, she suggested they had to restructure the debt or even just hold onto the house, with the client in,  even if they are not paying.

She said for the bank overall repossessions were not a profitable overall as that drives down prices and other people start to default. 

So in other words the market is far from free it's not only HTB, its debt relief and it's as if the banks are acting as a council. 

this confirms my thoughts on this.

 

once you have a mortgage and live in the property you are pretty much safe to live there whether you pay it or not

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18 minutes ago, happyguy said:

They are very, very reluctant to repossess now and would rather restructure the mortgage or give a payment holiday to ensure the mortgagee keeps the property

Indeed.

It seems nowadays the preferred solution for banks when someone falls into arrears, is to start deduct equity from the house as payment.

Say house price £250K, with 20% equity, that's £50,000. Then say monthly mortgage repayment at £1,000. If you cannot afford the payment, the bank can simply take £1,000 every month from your equity for a few years to wait for things to improve. 

It's a "win-win".

With the explosion of various forms of life time/retirement equity release schemes, what I believe I am seeing is that the mortgage industry is changing its tactics, in the sense that it will become common that a lot of people will live under the illusion that they own a house, whereas in reality, they NEVER actually own it. In the end, when they die or go to care home, the banks will take the lion's share of profits.

That's the final solution.

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1 minute ago, Speed1987 said:

I agree the housing market looking pretty strong at the moment.

Interestingly my sister works in finance and she's explained to me recently alot of people are in mortgage arrears. However she says they never aim to repossess, rather they just add the interest on monthly to the existing mortgage. For some this may cause them to loose several % from their equity. Can go on for years she said and as house prices keep going up their equity is going up.

She was also suggesting that the goverment have somewhat tied their hands with repossessions, she suggested they had to restructure the debt or even just hold onto the house, with the client in,  even if they are not paying.

She said for the bank overall repossessions were not a profitable overall as that drives down prices and other people start to default. 

So in other words the market is far from free it's not only HTB, its debt relief and it's as if the banks are acting as a council. 

Surely if people can't pay their mortgage it will just get worse and worse until they end up in negative equity?

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Well she explained that a client had not been paying for years but because the prices kept going up in her area, her equity actually was increasing funny enough, even though the bank were adding monthly interest payments.

That's what she said....

I found it difficult to fathom tbh, I would assume the bank would just repossess but she said legislation stops them and they can't put people into financial hardship, she explained the women had depression and kids

11 minutes ago, iamnumerate said:

Surely if people can't pay their mortgage it will just get worse and worse until they end up in negative equity?

Tbh most houses are going up by 10k a year, in brum my interest payments are only 1.5k and my house went up 10k last year. So I can see why the banks are just holding onto them, they just own more and more of your property slowly.

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1 hour ago, Speed1987 said:

Tbh most houses are going up by 10k a year, in brum my interest payments are only 1.5k and my house went up 10k last year.

It hasn't gone up until you actually sell it.

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2 hours ago, Speed1987 said:

they never aim to repossess, rather they just add the interest on monthly to the existing mortgage. For some this may cause them to loose several % from their equity

That's simply an IO mortgage in everything but name.

I'm pretty excited to see it collapse, but at the same time I do wonder how long this shell game can remain suspended.

PoorUnsteadyBactrian-max-1mb.gif

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1 minute ago, Locke said:

That's simply an IO mortgage in everything but name.

I'm pretty excited to see it collapse, but at the same time I do wonder how long this shell game can remain suspended.

PoorUnsteadyBactrian-max-1mb.gif

probably longer than most on here can wait

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1 minute ago, Locke said:

That's simply an IO mortgage in everything but name.

I'm pretty excited to see it collapse, but at the same time I do wonder how long this shell game can remain suspended.

PoorUnsteadyBactrian-max-1mb.gif

when you can print money ? infinitely

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In the long run, these unpaid mortgages will be paid for from a charge on the houses when they sell or get repo'd. And that drip drip drip of housing equity out if the market will, long run, suppress house prices.

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