Daily Mail Headline (16.08.08)

[Slumpmonkey Returns]

Middle-class homes crisis: 39,000 facing repossession as spectre of the Nineties returns

By Sean Poulter

Middle Britain is suffering a repossessions crisis - with the number of homes at risk at its highest level since the 1990s slump.

The number of court cases launched to take back homes was 39,078 in the second three months of the year, the highest figure since 1992.

And the courts granted 28,568 repossession orders, an increase around 25 per cent up on the same period last year.

In some of the country's most prosperous areas, home repossession cases have increased up to 95 per cent.

The figure for actions launched was up 95 per cent in Salisbury, 75 per cent in Buxton, 71 per cent in Stafford and 60 per cent in Winchester. The figure for repossession orders approved was up 131 per cent in Norwich.

The crisis is also hitting former housing hotspots such as Cheshire and the South West.

The number of repossession actions launched by banks, building societies and finance companies was up by more than half in Torquay, Truro, Bodmin, Barnstaple and Penzance.

The court cases do not automatically lead to a family losing their home, but can act as a threat to ensure debtors pay up.

Adam Sampson, chief executive of housing charity Shelter, said: 'The threat of repossession is affecting every income group throughout society, with huge rises in claims and orders in more affluent areas of the country.

'Every day we are seeing more and more people who are terrified of losing their homes.

'They're being punished by rising household bills, escalating fuel charges and food prices that are going through the roof. Tens of thousands are living with the fear of having the home they've worked so hard for being repossessed by lenders with little compassion.'

Shelter said mortgage lenders are getting tough with struggling customers and using repossession 'as the first rather than last resort.'

It said the number of people coming to the charity for help with mortgage possession actions over the past six months has increased by 55 per cent.

Mr Sampson warned those who are finding it difficult to meet their mortgage payments to seek advice early, and urged lenders to 'use repossession as the last rather than first option.'

The official figures published by the Ministry of Justice show that 18,900 homes were repossessed in the first three months of this year, up 41 per cent on the previous quarter.

LibDem Treasury spokesman Vince Cable said: 'These figures confirm the very worrying trend.

'The level of growth of repossession orders suggests that we are on track for a repossession crisis very similar to the early 1990s.'

He said the Government needs to impose a code of conduct on lenders to ensure repossession is avoided at all costs.

Housing minister Caroline Flint said: 'Whilst we are not seeing repossessions on the same scale as the early 1990s, we are making sure the right advice and support is available for the minority of borrowers who may need it at the moment because of global economic pressures.

'As well as expanding free legal representation in county courts for households at risk of repossession, we are providing more free debt advice, and are working closely with lenders to ensure that repossession is only ever a last resort.

'These services can make a real difference, with more than 80 per cent of repossessions avoided when they are used.'

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The VI's are right - it is different this time - it's worse. I think by next year the headlines will have to read "Middle-class homes crisis: 39,000 facing repossession as spectre of the Great Depression Housing Crash in the 1930's returns." This crash will be different as it was centered mainly on London and the South East last time and it didn't claim so many middle class victims. The multiples are much higher this time and the debt is enormous!

I would normally revel in headlines such as these - but now I'm actually getting quite nervous! We will have jobs in a 12 months time?

http://www.dailymail.co.uk/news/article-10...es-returns.html

EDIT for linky (sorry if this story has been posted already but I couldn't see it).

I think this was also a front page headline!

Edited August 16, 2008 by SlumpmonkeyII

[lufc]

Indeed it is a front page headline.

The number of court cases launched to take back homes was 39,078 in the second three months of the year, the highest figure since 1992.

That would be an annualized rate of 160,000 then, or 120,000 of repos that the courts granted.

I thought that the CML or whoever it was claimed that it was still a lot less than this ????

[Guest happy?]

***************************************************************************

The VI's are right - it is different this time - it's worse. I think by next year the headlines will have to read "Middle-class homes crisis: 39,000 facing repossession as spectre of the Great Depression Housing Crash in the 1930's returns." This crash will be different as it was centered mainly on London and the South East last time and it didn't claim so many middle class victims. The multiples are much higher this time and the debt is enormous!

I would normally revel in headlines such as these - but now I'm actually getting quite nervous! We will have jobs in a 12 months time?

http://www.dailymail.co.uk/news/article-10...es-returns.html

EDIT for linky (sorry if this story has been posted already but I couldn't see it).

I think this was also a front page headline!

The article presents no evidence whatsoever that this is a 'middle-class' problem unless one thinks that only the middle-classes live in Winchester. An excellent example of the Daily Mail at its best.

[Shrink Proof]

The article presents no evidence whatsoever that this is a 'middle-class' problem unless one thinks that only the middle-classes live in Winchester. An excellent example of the Daily Mail at its best.

Not quite. To be a really good Daily Wail article, you have to finish it left with the feeling that there's someone you really HATE.

[slurms mackenzie]

Thats got to be my favourite headline (daily mash excepted) in a long long time.

Argh the horror of it! It turns out its the middle classes who are being affected by the property crash, not those ghastly working classes and gay immigrent single parent disabled benefit spongers, now its a problem because it affects US !

Wibble!

Don't worry i'm sure tomorrow they'll be keeping us updated on the latest Lady Di & Maddy developments

[slurms mackenzie]

Not quite. To be a really good Daily Wail article, you have to finish it left with the feeling that there's someone you really HATE.

I HATE daily mail journalists does that count?

and i mean really really HATE

[Shrink Proof]

I HATE daily mail journalists does that count?

and i mean really really HATE

Proves my point.

BTW, if you REALLY want to screw up a Daily HateMail reader, tell them that paedophiles eat asylum seekers...

[Guest happy?]

Not quite. To be a really good Daily Wail article, you have to finish it left with the feeling that there's someone you really HATE.

The story's got legs - i.e. there will inevitably be more possessions. Presumably The Hate will have the opportunity to develop and demonise someone - heartless banks? uncaring bureaucrats? - they really need a target. Give it a few weeks they'll find someone and then the article will write itself.

[InternationalRockSuperstar]

[Lone_Twin]

Shelter said mortgage lenders are getting tough with struggling customers and using repossession 'as the first rather than last resort.'

Exactly as predicted by many on HPC.

.

ST

[slurms mackenzie]

Exactly as predicted by many on HPC.

.

ST

well it makes perfect sense i'm sure some smart economist could bring game theory into this, the banks could all play it cool and not try to reposses because they know that by doing so, they bring down the value of the assets their money is secured against, or they could look out for themselves individually and realise that any loan done to an LTV of 80% will be above 100% in 2 years time and a liability to them. All it takes is for one bank to break ranks and the rest of them know they have to reposesss or face losses.

After that its a race to the bottom, I think thats what we're seeing but it's only just starting

[Mina]

To show how this compares to the last crash:

Annualised at current levels: 120,000 orders granted.

1992 total orders granted: 126,881. Worst year was 1991 (142,905 granted).

http://www.justice.gov.uk/docs/stats-mortg...toric-87-07.xls

[slurms mackenzie]

To show how this compares to the last crash:

Annualised at current levels: 120,000 orders granted.

1992 total orders granted: 126,881. Worst year was 1991 (142,905 granted).

http://www.justice.gov.uk/docs/stats-mortg...toric-87-07.xls

Yes, but without delving into those stats too much because i think they were on another thread these aren't being translated directly into repossesions as much as in the early 90's.

This could be because the banks learnt their lesson from that time and want to get in early so the nature of the cases has changed, or my own belief * people still have access to credit cards and there's more scope to delay the inevitable day of reckoning.

* Its not actually a guess, but that damn data protection act means i can't publish the stats i'd love to

[Bloo Loo]

To show how this compares to the last crash:

Annualised at current levels: 120,000 orders granted.

1992 total orders granted: 126,881. Worst year was 1991 (142,905 granted).

http://www.justice.gov.uk/docs/stats-mortg...toric-87-07.xls

It was anecdotally thought at the time (1992 ish) that handing in the keys known as a "quiet" possession accounted for about twice as many again.

And yes, I am able to sit down and relax again as posters on here suggesting banks have no incentive to possess in a falling market are very quiet.

[Mina]

Yes, but without delving into those stats too much because i think they were on another thread these aren't being translated directly into repossesions as much as in the early 90's.

This could be because the banks learnt their lesson from that time and want to get in early so the nature of the cases has changed, or my own belief * people still have access to credit cards and there's more scope to delay the inevitable day of reckoning.

* Its not actually a guess, but that damn data protection act means i can't publish the stats i'd love to

I don't understand. Are you saying that the banks go to court, a repo order is granted, but to avoid repossession the mortagee then uses a credit card to settle the debt?

[slurms mackenzie]

I don't understand. Are you saying that the banks go to court, a repo order is granted, but to avoid repossession the mortagee then uses a credit card to settle the debt?

sorry its not quite like that, the judge doesn't accept visa

but i have seen a lot of people bailed out on the last day, a sub prime lender comes in further down the ladder and bails the people out at an extortianate rate at the last minute, or they get credit and can suddenly find that little bit of extra money a court order is made and the person promises to pay off their debt rather than get repossesed

Edited August 16, 2008 by slurms mackenzie

[Mina]

sorry its not quite like that, the judge doesn't accept visa

but i have seen a lot of people bailed out on the last day, a sub prime lender comes in further down the ladder and bails the people out at an extortianate rate at the last minute, or they get credit and can suddenly find that little bit of extra money a court order is made and the person promises to pay off their debt rather than get repossesed

That is only delaying the inevitable.

[Bloo Loo]

I don't understand. Are you saying that the banks go to court, a repo order is granted, but to avoid repossession the mortagee then uses a credit card to settle the debt?

The banks dont REPO

They get possession to liquidate a debt.

As soon as the debt is cleared, the owner has full rights again, unless, the property is sold.

[slurms mackenzie]

That is only delaying the inevitable.

Absolutely !

It's tragic to see, I work in the last chance saloon, some people make it out, most just prolong their misery.

[slurms mackenzie]

The banks dont REPO

They get possession to liquidate a debt.

As soon as the debt is cleared, the owner has full rights again, unless, the property is sold.

But it normally is sold isn't it? I know in some cases the properties are actually rented out and the debt settled that way.

[0q0]

well it makes perfect sense i'm sure some smart economist could bring game theory into this, the banks could all play it cool and not try to reposses because they know that by doing so, they bring down the value of the assets their money is secured against, or they could look out for themselves individually and realise that any loan done to an LTV of 80% will be above 100% in 2 years time and a liability to them. All it takes is for one bank to break ranks and the rest of them know they have to reposesss or face losses.

After that its a race to the bottom, I think thats what we're seeing but it's only just starting

Just guessing here, but perhaps the reason they do go to court quite soon against a defaulting borrower is that few borrowers stick to a stay of execution repayment plan and find themselves again falling into arrears either due to their own lax control of spending or plain and simple drowning in the ever increasing cost of living and day to day bills.