Monday, July 9, 2007

Strain felt as missed payments double in a year

460,000 mortgage payments missed in the past six months as interest rates bite

Mortgage customers are feeling the pain as interest rates rise with more than 460,000 missing monthly payments in the past six months, new MoneyExpert.com research shows...Around 77,000 mortgage payments are being missed every month, the independent financial comparison website says. And it fears the number could be set to rise as the Bank of England continues to pile on the pressure.

Posted by converted lurker @ 04:01 PM (595 views)
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8 thoughts on “Strain felt as missed payments double in a year

  • Have some!

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  • Census Bureau

    IDB Summary Demographic Data for United Kingdom


    Demographic Indicators:  2005 and 2025
    
                                                    2005        2025
    Births per 1,000 population....................   11          10
    Deaths per 1,000 population....................   10          10
    Rate of natural increase (percent).............  0.1         0.0
    Annual rate of growth (percent)................  0.3         0.2
    Life expectancy at birth (years)............... 78.4        81.1
    Infant deaths per 1,000 live births............    5           4
    Total fertility rate (per woman)...............  1.7         1.7
    
    Midyear Population Estimates and Average Annual Period Growth Rates:
    1950 to 2050 
           (Population in thousands, rate in percent) 
    
                                                              Growth
    Year   Population       Year   Population      Period       Rate
    
    1950       50,127       2005       60,441      1950-1960      0.4
    1960       52,372       2006       60,609      1960-1970      0.6
    1970       55,632       2007       60,776      1970-1980      0.1
    1980       56,314       2008       60,944      1980-1990      0.2
    1990       57,493       2009       61,113      1990-2000      0.3
    
    2000       59,522       2010       61,285      2000-2010      0.3
    2001       59,723       2020       63,068      2010-2020      0.3
    2002       59,912       2030       64,304      2020-2030      0.2
    2003       60,095       2040       64,462      2030-2040      0.0
    2004       60,271       2050       63,977      2040-2050     -0.1
    
    Midyear Population, by Age and Sex:  2005 and 2025
    (Population in thousands)
    
              ------------2005-----------     ------------2025-----------
    AGE           TOTAL     MALE   FEMALE         TOTAL     MALE   FEMALE
    
    TOTAL        60,441   29,883   30,558        63,819   31,650   32,168
    0-4           3,305    1,694    1,611         3,333    1,709    1,624
    5-9           3,574    1,829    1,745         3,372    1,728    1,644
    10-14         3,841    1,967    1,874         3,316    1,698    1,618
    15-19         3,958    2,028    1,930         3,347    1,708    1,638
    20-24         3,910    1,999    1,912         3,589    1,822    1,766
    25-29         3,765    1,927    1,838         3,963    2,009    1,954
    30-34         4,128    2,118    2,010         4,271    2,171    2,100
    35-39         4,684    2,385    2,299         4,345    2,217    2,127
    40-44         4,810    2,449    2,361         4,167    2,135    2,032
    45-49         4,174    2,110    2,064         3,912    2,009    1,903
    50-54         3,713    1,852    1,862         4,164    2,132    2,032
    55-59         3,943    1,949    1,995         4,561    2,301    2,260
    60-64         3,100    1,515    1,585         4,483    2,236    2,247
    65-69         2,675    1,284    1,391         3,675    1,793    1,882
    70-74         2,287    1,058    1,229         3,000    1,411    1,589
    75-79         1,917      822    1,095         2,765    1,239    1,526
    80-84         1,458      554      904         1,746      728    1,018
    85-89           746      239      506         1,046      390      656
    90-94           340       87      254           512      160      352
    95-99            96       18       78           196       46      150
    100+             17        2       15            56        9       47
    
    Source: U.S. Census Bureau, International Data Base, August 2006 version.
    

    Population pyramid for United Kingdom year 2005Population pyramid for United Kingdom year 2025


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  • uncle chris says:

    Are you having fun LVM or just demonstrating your talent for posting. Much as I am reassured I’ll have my pick of women when I reach the grand old age of 100, could I ask the link between missed mortgage payments and population demographics?

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  • Cheekie Charlie says:

    “It can mean looking to consolidate loans and exploring secured loans against the value of their home. Many of us have considerable equity in our homes which can be used.”
    You just don’t get it do you!

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  • @Uncle Chris,

    Thanks for asking.

    What proportion of the UK mortgage population does 460,000 missed mortgage payments represent?

    How can our “banking system” cope with such a large number of defaults? Answer: it likely cannot.

    As an exercise, assuming the average household is 2.31 people, 460,000 missed mortgage payments equates to over 1m people in hock. If these people are all aged 20 – 60, then we are looking at 3% defaults in the ENTIRE population of people aged 20 – 60. Someone, I doubt our banks’ liquidity covenants can cope with this strain.

    Note: the total number of people in the UK aged 20 – 59 is 33,127,000

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  • Let me congratulate lmvreader for posting proficiency, and let me give you a simple benchmark:

    there were only circa 450,000 repossessions in total between 1990 and 1993

    if we have 470k arrears now we are in deepest sh**
    but it is probably not 470k different mortgages but multiple missed monlthly payment on the same mortgage.
    At any rate, still we probably have some 150-200k borrowers in deep sh**

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  • Stoatgobbler says:

    LVM, no it doesn’t. It’s 460,000 missed payments in total, so possibly as few as 76 odd thousand households in arrears.

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  • Great post guys,

    If I can add that a few hundred thousand fixed rate mortgages are just about to end and get reset, with some monthly mortgage bills increasing by 30% or more.

    Oh dear, poor old banks, profit margins won’t be so clever this time next year.

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