Monday, November 6, 2006
Why banks’ moans about IVas ring hollow
Britain’s borrowers aren’t out for the count yet, but some of them are certainly getting acquainted with the canvas. While consumer lending continues to soar, the number of debtors who find they can’t cope is picking up even faster. Personal insolvencies hit another record high last quarter, up by 55% year-on-year to 27,644, mainly due to a surge in IVAs. Mortgage repossession orders are back to levels not seen since the shakeout from the last housing crash. And the numbers are likely to get worse before they get better. Awash with cash in our high-liquidity world, lenders have been handing it out like play money. Then, for some reason, they’re baffled when it doesn’t come back again.