Repossessions And Bankruptcies "soar"

[Realistbear]

http://www.newsandstar.co.uk/news/viewarticle.aspx?id=392331

Bankruptcies and repossessions soar

Published on 21/07/2006

By Phil Coleman

MOUNTING debts are forcing an increasing number of Cumbrians out of their homes and into the courts as they are declared bankrupt.

In the first three months of the year, judges at Whitehaven County Court approved 40 mortgage repossessions and 47 bankruptcies – 147 per cent more than in the same period a year earlier. Carlisle saw 40 declared bankrupt with 27 losing their homes.

The figures were part of a Cumbria-wide picture of deepening debts, with 137 people across the county being declared bankrupt – around twice as many as in the first three months of 2005.

The crisis has prompted some politicians and debt experts to call for tighter controls on loan companies, some of which are accused of offering credit too freely and charging extortionate interest.

Experts have highlighted several possible causes of the worsening problem, including Cumbria’s rapid recent house inflation, and the widespread and easy availability of credit.

And they said it could not happen in the new paradigm. Those who bought into the Miracle Economy where debt is not a problem are finding out that while house prices are just a matter of opinion debt is very real.

Edited July 21, 2006 by Realistbear

[OzzMosiz]

In the meantime, shares in companies offering IVA's have been flying off the shelves!

[brassfarthing]

MOUNTING debts are forcing an increasing number of Cumbrians out of their homes and into the courts as they are declared bankrupt.

In the first three months of the year, judges at Whitehaven County Court approved 40 mortgage repossessions and 47 bankruptcies – 147 per cent more than in the same period a year earlier. Carlisle saw 40 declared bankrupt with 27 losing their homes.

Crikey, it's all going off in Whitehaven.

[Hopeful FTB]

http://www.newsandstar.co.uk/news/viewarticle.aspx?id=392331

Bankruptcies and repossessions soar

Published on 21/07/2006

By Phil Coleman

MOUNTING debts are forcing an increasing number of Cumbrians out of their homes and into the courts as they are declared bankrupt.

In the first three months of the year, judges at Whitehaven County Court approved 40 mortgage repossessions and 47 bankruptcies – 147 per cent more than in the same period a year earlier. Carlisle saw 40 declared bankrupt with 27 losing their homes.

The figures were part of a Cumbria-wide picture of deepening debts, with 137 people across the county being declared bankrupt – around twice as many as in the first three months of 2005.

The crisis has prompted some politicians and debt experts to call for tighter controls on loan companies, some of which are accused of offering credit too freely and charging extortionate interest.

Experts have highlighted several possible causes of the worsening problem, including Cumbria’s rapid recent house inflation, and the widespread and easy availability of credit.

And they said it could not happen in the new paradigm. Those who bought into the Miracle Economy where debt is not a problem are finding out that while house prices are just a matter of opinion debt is very real.

Just out of interest, is this a similar pattern to what happened the last time the housng market crashed in the late 80's or did it happen further down the cycle when IR's had gone through the roof?

[grey shark]

Pretty obvious really , looks like there will be even more sheep on the streets soon , anyone want a consolodation loan ?

[benjamin]

more of the same

http://www.cumberland-news.co.uk/opinion/v....aspx?id=392229

[Charlie Don't Surf]

These turkeys are going insolvent when all the BOE have done is lowered IRs!! Think what it's going to be like if/when they start hiking them!

[quenkish]

That part of Cumbria is in an even greater property bubble then the rest of the UK. Towns like Maryport have seen unbelievable rises, even the industrial town of Workington which is very depressing & in decline has seen some crazy rises in property prices, but it is the small villages around that region that have the most craziest prices.

Considering that their are no jobs in the area & that it is off the tourist track makes the entire houseprice scenario there scary!

[Impartial]

Just out of interest, is this a similar pattern to what happened the last time the housng market crashed in the late 80's or did it happen further down the cycle when IR's had gone through the roof?

when the figure reaches 30/40 pr 50k repos i'll take more notice. 12k isn't actually that much.

[OnlyMe]

Some of these rural areas are effectivel going to be economically cleansed, with little or no local economy, no big employers (nobody can afford to work for them) a part-time popualtion and still no housing for people to live and work inthe areas. Shops/pubs and other small retail is being closed down/bought up and converted. A big petrol price increase and tourism will be shot to bits and what remains of the locals will face expensive journeys to even get the basics. The rural economy is going the same way as manufacturing - priced out of existence.

Hopeful FTB.

It started with the ending of double Miras - prior to its ending houses were bid up, afterwardds there was nothing left in the tank, the rate rises came later

[quenkish]

Some of these rural areas are effectivel going to be economically cleansed, with little or no local economy, no big employers (nobody can afford to work for them) a part-time popualtion and still no housing for people to live and work inthe areas. Shops/pubs and other small retail is being closed down/bought up and converted. A big petrol price increase and tourism will be shot to bits and what remains of the locals will face expensive journeys to even get the basics. The rural economy is going the same way as manufacturing - priced out of existence.

Hopeful FTB.

It started with the ending of double Miras - prior to its ending houses were bid up, afterwardds there was nothing left in the tank, the rate rises came later

In Cumbria it is looking that way already, the locals (even the ones on wages that are ok) are really being priced out.

[Marina]

http://www.newsandstar.co.uk/news/viewarticle.aspx?id=392331

Bankruptcies and repossessions soar

Published on 21/07/2006

By Phil Coleman

MOUNTING debts are forcing an increasing number of Cumbrians out of their homes and into the courts as they are declared bankrupt.

Well, let's hope the courts have plenty of bedrooms.

When are people going to get angry.

Angry about being priced out and angry about people being booted out of their homes by lenders who lent them more than they could afford to repay.

Lots of people don't understand money - which is why the Financial Services industry is regulated. Selling someone an inappropriate investment is a punishable offence. Lending someone more than they can reasonably afford to repay should be a punishable offence also.

[quenkish]

Well, let's hope the courts have plenty of bedrooms.

When are people going to get angry.

Angry about being priced out and angry about people being booted out of their homes by lenders who lent them more than they could afford to repay.

Lots of people don't understand money - which is why the Financial Services industry is regulated. Selling someone an inappropriate investment is a punishable offence. Lending someone more than they can reasonably afford to repay should be a punishable offence also.

This houseprice inflation (bubble) is messing around with peoples lives etc, it is effecting the social fabric of our society.

I read the other day of a newly qualified doctor who could not afford to buy a home.

When (if?) this bubble bursts we are going to see the serious consequenses for years to come.

Hopefully people will realise how overrated Gordon Brown is & how out of touch & incompetant this Government really are.

[brassfarthing]

This houseprice inflation (bubble) is messing around with peoples lives etc, it is effecting the social fabric of our society.

I read the other day of a newly qualified doctor who could not afford to buy a home.

When (if?) this bubble bursts we are going to see the serious consequenses for years to come.

Hopefully people will realise how overrated Gordon Brown is & how out of touch & incompetant this Government really are.

I'm quite an admirer of Gordon Brown. I think he gets far too bad a press on this forum. Why? Because 25 year olds who watch too many 'property porn' TV programmes can't afford to buy 3 or 4 bed houses in nice areas. It has to be someone else's fault. When you think that previous Labour administrations had much higher income tax and corporation tax, things aren't so bad. Brown has actually changed very little since the last Tory administration. Most of our current problems with debt and HPI began with the Tories. All the good council housing sold off for peanuts, financial deregulation, expansion of credit, but most of all, the "Greed Is Good" philosophy of the Thatcherite 80s.

Actually, if Brown had taken stiff measures agains these things, you'd all be moaning about the interfering Chancellor.

You perceive yourselves as victims, and need someone to blame.

Edited July 21, 2006 by brassfarthing

[bearwithaconscience]

This houseprice inflation (bubble) is messing around with peoples lives etc, it is effecting the social fabric of our society.

I read the other day of a newly qualified doctor who could not afford to buy a home.

When (if?) this bubble bursts we are going to see the serious consequenses for years to come.

Hopefully people will realise how overrated Gordon Brown is & how out of touch & incompetant this Government really are.

It's no joke. Things are bad on average, but in some areas it is even more ludicrous. Round here, half the people work in shops and offices on low wages, yet an FTB flat is going for 250k... You need to be fairly well off to consider taking that on. Wage inflation is just not going to help them out in years to come.

It might take a long time for this to hit. People will hang on for dear life to their homes and investments. Listen to the BTL landlords subsidising their investments each month, dreaming of the capital gains yet to come. FTBs taking out an interest only mortgage or a self cert they can't afford to buy a tiny new build. They are all in denial about reality and no-one wants to miss out.

It is tragic. I can't feel any sense of Schadenfreude. I just feel angry that the government have let us get into this mess. Yes people are stupid for doing it, but the powers that be should have spotted it happening and put a cap on it, instead of reying on the consumer debt mountain to fuel the economy. It amounts to fraud really, and the backlash will be severe and swift.

I'm quite an admirer of Gordon Brown. I think he gets far too bad a press on this forum. Why? Because 25 year olds who watch too many 'property porn' TV programmes can't afford to buy 3 or 4 bed houses in nice areas. It has to be someone else's fault. When you think that previous Labour administrations had much higher income tax and corporation tax, things aren't so bad. Brown has actually changed very little since the last Tory administration. Most of our current problems with debt and HPI began with the Tories. All the good council housing sold off for peanuts, financial deregulation, expansion of credit, but most of all, the "Greed Is Good" philosophy of the Thatcherite 80s.

Actually, if Brown had taken stiff measures agains these things, you'd all be moaning about the interfering Chancellor.

You perceive yourselves as victims, and need someone to blame.

Seriously, even I won't rise to this one...

[Fancypants]

Some of these rural areas are effectivel going to be economically cleansed, with little or no local economy, no big employers (nobody can afford to work for them) a part-time popualtion and still no housing for people to live and work inthe areas. Shops/pubs and other small retail is being closed down/bought up and converted. A big petrol price increase and tourism will be shot to bits and what remains of the locals will face expensive journeys to even get the basics. The rural economy is going the same way as manufacturing - priced out of existence.

and yet we are portrayed as the "doom-mongers" for wanting an end to insane HPI!

[lulu]

That part of Cumbria is in an even greater property bubble then the rest of the UK. Towns like Maryport have seen unbelievable rises, even the industrial town of Workington which is very depressing & in decline has seen some crazy rises in property prices, but it is the small villages around that region that have the most craziest prices.

Considering that their are no jobs in the area & that it is off the tourist track makes the entire houseprice scenario there scary!

Yes Cumbria is a very worrying example. On one side there are very desirable houses in beautiful areas which are being bought by the retirement/holiday home crowd for absolute fortunes.

On the other there are the rundown economically defunct areas like Maryport/Workington (though there are nice bits in them all) and the like. We are not talking about houses with lakeside views here. We are talking about ex-LA estates which unfortuantly have increasing problems with drugs/unemployment.

The problem is that this part of the world is getting increasingly left behind economically (if Sellafield closes there will be literally nothing in the county) and there is not the skilled population to attract big employers to the areas - so why prices are going up so fast is a mystery to me - maybe people speculating from outside the region? - no one that lives there would be able to afford it.

I grew up there and out of my peer group at school, only one is still in the County and she works in the courts (so presumably she is very busy just now) there are few options for those who are left.

[Fancypants]

Yes Cumbria is a very worrying example. On one side there are very desirable houses in beautiful areas which are being bought by the retirement/holiday home crowd for absolute fortunes.

On the other there are the rundown economically defunct areas like Maryport/Workington (though there are nice bits in them all) and the like. We are not talking about houses with lakeside views here. We are talking about ex-LA estates which unfortuantly have increasing problems with drugs/unemployment.

The problem is that this part of the world is getting increasingly left behind economically (if Sellafield closes there will be literally nothing in the county) and there is not the skilled population to attract big employers to the areas - so why prices are going up so fast is a mystery to me - maybe people speculating from outside the region? - no one that lives there would be able to afford it.

I grew up there and out of my peer group at school, only one is still in the County and she works in the courts (so presumably she is very busy just now) there are few options for those who are left.

I gather that large numbers of people from West Cumbria are petitioning the govt to make sure that they get new plant when the new nuclear facilities are rolled out...

Rather at odds with the Irish, Greenpeace and the Nordic lot

[northern numpty]

yep......shame this big ol county is witnessing a crash...as most of these good folk are not btl ers.....and have not engaged in astronomical mortgages as such(well in comparative terms 14.2 kpa mean average wage)just 70-80k houses...still 5x income....but not in it for profit.......just the scumbag out of towners with their little leather satchals stocking up on affordable houses for their btl portfolios....making this county wither in the aftermath......sadly repos coming up left right and centre,and i feel slightly bad that ive jst bought one...hope previous vendors do bounce back....probably not though.

[warwickbloke]

Well, let's hope the courts have plenty of bedrooms.

When are people going to get angry.

Angry about being priced out and angry about people being booted out of their homes by lenders who lent them more than they could afford to repay.

Lots of people don't understand money - which is why the Financial Services industry is regulated. Selling someone an inappropriate investment is a punishable offence. Lending someone more than they can reasonably afford to repay should be a punishable offence also.

What exactly should be the lending criteria then, to ensure that nobody ever overborrowed.

It's a very difficult rule to govern due to peoples individual tastes.

If the choice to decide debt is removed there is revolt at lack of free choice.

When choice is given people are blameless for making the incorrect choice?

Either way there will be complaints, but the mistakes will surely prove to deter a large amount of people from repeating the mistake. At least it should short term, but the next cycle will surely produce similar results.

Financial Services industry can ensure that regulated loans at regulated rates are maintained, they are not expected to oversee every persons individual expenditure.

There is plenty of advice available, but many are 'too intelligent' to need to ask. This is their choice, right or wrong.

I certainly don't want to have to ask somebody at the bank if it is OK to spend some money, the choice is mine.

[Marina]

What exactly should be the lending criteria then, to ensure that nobody ever overborrowed.

It's a very difficult rule to govern due to peoples individual tastes.

If the choice to decide debt is removed there is revolt at lack of free choice.

When choice is given people are blameless for making the incorrect choice?

Either way there will be complaints, but the mistakes will surely prove to deter a large amount of people from repeating the mistake. At least it should short term, but the next cycle will surely produce similar results.

Financial Services industry can ensure that regulated loans at regulated rates are maintained, they are not expected to oversee every persons individual expenditure.

There is plenty of advice available, but many are 'too intelligent' to need to ask. This is their choice, right or wrong.

I certainly don't want to have to ask somebody at the bank if it is OK to spend some money, the choice is mine.

You must agree there are lots of people that 'buy' the VI bull? There is a constant and insidious stream of half truths, suggestions and mis-information.

I agree it is not easy to regulate .... wait, hold on a minute, yes it is - because it bloody well used to be regulated until Margaret Bloody Thatcher got involved. When I were a lad, aye, the most you could borrow was 2.5 times one salary and 1 times the other. I think it is a pretty good rule. If interest rates are high your mortgage payments stay manageable. If interest rates are low, your payments go down leaving you disposable income to spend. Surely it is better for an economy to grow by people spending disposable income than by spending borrowed money.

Nothing is perfect - as you point out - but that is not an excuse for trying to make it better.

The lenders have tied the whole country in knots and the government has been complicit - desperate to keep the economy ticking over at any (borrowed) price so they cannot be called financially incompetent - as all previous Labour governments have been.

The irony is - this is the worst Labour government ever. Financial incompetence doesn't begin to describe the utter folly of allowing borrowing to spiral out of control. When interest rates do rise - you won't get a recession - you'll get something most people can't remember and that is a slump. Read up on the 1930s - that is what is in store for us.

[warwickbloke]

You must agree there are lots of people that 'buy' the VI bull? There is a constant and insidious stream of half truths, suggestions and mis-information.

I agree it is not easy to regulate .... wait, hold on a minute, yes it is - because it bloody well used to be regulated until Margaret Bloody Thatcher got involved. When I were a lad, aye, the most you could borrow was 2.5 times one salary and 1 times the other. I think it is a pretty good rule. If interest rates are high your mortgage payments stay manageable. If interest rates are low, your payments go down leaving you disposable income to spend. Surely it is better for an economy to grow by people spending disposable income than by spending borrowed money.

Nothing is perfect - as you point out - but that is not an excuse for trying to make it better.

The lenders have tied the whole country in knots and the government has been complicit - desperate to keep the economy ticking over at any (borrowed) price so they cannot be called financially incompetent - as all previous Labour governments have been.

The irony is - this is the worst Labour government ever. Financial incompetence doesn't begin to describe the utter folly of allowing borrowing to spiral out of control. When interest rates do rise - you won't get a recession - you'll get something most people can't remember and that is a slump. Read up on the 1930s - that is what is in store for us.

The high level of debt now is not all home ownership, this is still controlled to an extent, it seems the majority of folk seem more concerned by the monthly payment than the price paid or the gross result.

It is the other borrowing causing the most concern, this is the part that will be so difficult to control.

I reckon there will be a lot of frustration at tighter lending but it should be introduced, I have no idea how to control it.

It should be possible with all the data available now, but a brave government would be required.

I also wonder what our manufacturing/retail sectors would be like now if lending hadn't been so free recently.