Repossessions 'to rise to 75,000'

Before I handed my keys back in 1992, my mortgage interest of 1300 per month was paid for by welfare for 13 months.

Those were the days!

Hmmm.

I checked with the Citizens Advice Bureau to see when HMG helps people out.

It is in the 40th week after claiming Jobseekers Allowance.

A little late after the bailiffs have been in at 3 months or even the new 6 month period.

Robert I can't imagine how it'll be when all those buy-to-lets get into trouble. I think this is just the start of it. I know the government are really trying to delay the crash but it's going to happen and the pace will quicken.

I don't understand why it wouldn't be possible to have a payment holiday of defined duration, say 6 months, under a properly drawn -up agreement, whereby the payment is skipped and tacked on to the end of the mortgage. Meantime the mortgage would accrue interest in the ordinary way.

That way, people would be able to stay in their homes and the mortgage provider gets paid off a further few months down the line?

What's wrong with that?

No surprise really.

I have recently opened a Euro account and half moved half my savings into it.

If the government thinks they will save those who cannot live within their means by printing money and slashing saving rates all that will happen is Sterling will crash much further.

If need be i will completely abandon the £UK.

House prices will need to fall to their true level and then our currency will stop falling it we are not already forced to the IMF or into the Euro.

I hope the Government is also looking at ways to prevent the trauma of people becoming homeless when they lose a job if they rent, not just for those who have been able to buy. Housing benefit is a wholly inadquate system, if this is the objective!

factors that should be TIC (take into consideration)
- Unsecured debts or Limited Companies Liabilities are not offset against personal assets
- Allow settlement payments for negotiated amounts
- freezing of escalating interest and charges
- calculating original credit card debts V additional interest + late fees
- reconciling debt claims + investigating over charging
- other factors for consideration such as divorce cost, legal fees, CSA demands, credit crunch unemployment,

Why the SHOCK??

It will no doubt be more?

What about the sale & rent backs?

The sub prime brigade??

THINK ON FOR 100,000 plus. . . .


LABOUR HAVE BUST THE NATION AGAIN.

How many of the expected reposessions will be council houses purchased at knock down prices ,then maxed out and defaulted on, leaving the incumbent "home oweners" to join the queuers to claim another set of rites to council housing .

Par lammentable Dimockrazy gone mad !


Who will pay the hire taxis?

This is the real tragedy of the downturn/recession/depression.

Baby boomers have mostly finished paying off their morgages but people of the next generation in their 20s and 30s (like my children) are really struggling. If they need to remortgage because they've come to the end of a fixed rate deal then they often can't as the mortgage lenders won't lend on favourable terms on more than 75% of the property's value so they're stuck with the high SVR rate.

Their mortgages are frighteningly huge in real terms; if they should lose their jobs they're really vulnerable and all this on top of paying back massive student loans and maybe not in work for a while if they're starting a family.

Meanwhile there are many older people (well-off pensioners) especially in the south east in houses which are much bigger than they really need and which are now rapidly losing value. These are often good family houses lived in by only one or two people who don't need all the space but are firmly attached to their family home.

This is another tragedy in that our housing stock is "blocked" and those in need aren't getting access to these resources. There are also plenty of people who have more than one property and that is yet another tragedy for those in cramped and inadequate housing.

In other words, there is a complete mis-match between housing needs and what people actually have.

I seem to remember GB saying he was going to do something about housing when he first came in as PM but he seems to have gone strangely quiet recently.

Dear Robert
There is absolutley no reason what so ever as to why Homes should be repossessed, in this economic climate, it is unjust and unfair, as the banks created this problem all along.
People sholuld be given twelve months or more to sort them selfs out, and interest rates should have been passed on, --- AND NOT PUT UP, this is senseless profiteering in the face of a "bank created" economic turn dow,

Bert - think you might find we have more houses and more home owners now!

also strip out the investor market and give us the real figure and stop meddling with what you blatantly do not understand

Dear Robert
There is absolutley no reason what so ever as to why Homes should be repossessed, in this economic climate, it is unjust and unfair, as the banks created this problem all along.
People sholuld be given twelve months or more to sort them selfs out, and interest rates should have been passed on, --- AND NOT PUT UP, this is senseless profiteering in the face of a "bank created" economic turn down

1. Will tax payers save the home speculators in addition to saving the banks?

2. Will the presenters of "property porn" shows be brought to account for giving unsound financial advice to millions of viewers?

3. Will the prudent savers (who did not live the life of Riley on the never never) have to pay to bail out those who lived like Lords on debts that they knew they would never be able to pay and would never have to repay?

This may sound heartless but these people have priced other people out of the market by stretching themselves to the absolute limit. They did this believing that housing was a never ending bubble that would never burst, it was inevitable.

Estate agents and sellers motivated by greed played on these peoples jealousies and fear of missing the boat, it is a crises that the populous is responsible for as much as government and business.

Said it before and I'll say it again, there is no point in banks repossessing houses at the moment. As soon as they act they are literally halving their assets.

So what do they do? They can't simply declare a moratorium on repossessions, otherwise everyone would simply stop paying their mortgages and the banks would all go under within a week or two.

What's needed is a more rational approach whereby genuine defaulters are given the chance to stay in their homes but under altered conditions - perhaps the banks take back the ownership under a part ownership scheme.

Another question for everyone out there - when a repo property is put up for auction by the banks, is the guide price just a reflection of what the bank is owed or a reflection of what the property is worth on the open market?

That is to say, is a property worth £200k with a 50% mortgage viewed by the banks as a £100k asset and when it comes to be sold do they just look for that or attempt to preserve any of the nominal value above that?

As I mentioned in my last response to GuyCroft on yesterday's RBS blog, HMG should simply hand out taxpayer money to those wanting to buy, just as much as it is trying so desparately to do to those who are already on the 'ladder'.

So I would like my savings to be doubled or tripled for free by HMG, at which point I am happy to contribute it all towards a 25% deposit for a house purchase.

Surely this is fair and sensible because

1) It does not penalize those who are not homeowners in favour of those that are as the current plan will achieve
2) It keeps the housing values unrealistically high, again GB's clear aim
3) This will stop prices falling by creating new demand, put a floor under RMBS and CDOs, and repair the assets side of banks' balance sheet - again a desirable HMG objective
4) It will inflate away the value of debt - again something HMG is desparate to achieve given te mountains of cash they are throwing at the probelms to stave off deflation.
5) It will kill renters/savers/pensioners/sterling, but that is happening ANYWAY

IN OTHER WORDS, a very good and certainly much fairer solution is to line up all potential FTBuyers and double/triple their deposits instantly - taxpayer funded of course.

Lunacy? How are any of the measures that throw cash at existing homeowners any better or fairer?

When GB's objectives are in itself lunacy, why not go the whole hog as I have suggested?

Bring on the repossessions, and the CML/homeowners should quit whining. Leave that to the shafted renters/savers. At least they have good reason.

So any bets on when the election will be?

May 2009 looks favourite

#3, Crash Gordon only has to put it off until after the election and then you are stuck with him for another five years. I mean it is not like it is going to affect him now is it?

All,

The law changes in April

NOW

Government pay after 39 weeks, ALL interest upto 100k indefinitely

WILL BE

Government pay after 13 weeks, ALL interest upto 150k for 2 years!

#5, way ahead of you... come out to the far east. Better weather better food and the "fat" here means size 10. Oh and tiny rates of tax....

Robert,
You should really do a bit of maths on that figure. Supposing the banks were to make a £100,000 loss per repossession, that would make the total losses next year as a result of depreciation in the housing market to be £7.5 billion, well within limits of affordability and well less than the total additional capital that the banks have been asked to raise.

My view is that those on this thread who think this is forecast is just the lower figure are probably right.

More significant is that this lower figure is the worst of the 1991 figures.

The message then is clear; the current recession is going to be worse than that in the early Nineties.

Yet this time, we are told, the government is going to do `everything it takes' to ensure that ordinary `hard-working' families are to be protected from the worst. This is of course unlike those vicious Tories who would do nothing.

I am beginning to believe that doing nothing is probably the best strategy. The economy is in flux, it is going to hit the floor hard and efforts to achieve a different outcome are too little, too late. The time to have done something was three years ago when we were `enjoying the longest period of economic growth in two hundred years'.

So we are left with a government sloshing cash around like no tomorrow, borrowing like mad, achieving nothing of any significance as the economy goes to hell in a handcart taking the hopes, dreams and wealth of millions with it.

This is just not acceptable: Brown and New Labour must go and go now! Time for a National Government to reconstruct our country.

#2 Toldyouitwould

I had to wind up my company in June, and have only now started working - there are no jobs out there so I have had to start again freelance self-emloyed

I couldn't claim Jobseekers as we had other income coming into the house that is above the £148 a week Gov has decided is what a family needs to live on.

£148!

That income was from my wifes p/t job that she made full time when I wasn't working even though she is dying from cancer.

So, no mortgage help for us as we weren't able to claim Jobseekers which is the trigger for getting mortgage help.

I'm not one to moan, but it hardly seems for the middle class that have paid tax and given employment to people in companies they created... (btw, we were going 18 years and employed 5 people in UK and USA)

No welfare state for us it seems...

Every one of these 75,000 represents a tale of misery and despair for one family.

The politicians only care about the headline figures and those repossessed have only the ballot box with which to voice their misery.

How Labour's ratings can be going up is quite beyond me. Gordon Brown and his cronies have ruined this country. Please let us have an election before they do even more damage.

Repossession? Try DISPOSSESSION the banks are stealing from us all !!!

75,000. Is that all? Surely it will be twice that.

Hmm.. Not so sure. Several things are either different than 1992 or are shortly about to change.

1. Several lenders have now agreed not to start repossession proceeding until at least six months of arrears have accrued.

2. DSS rules shortly change, whereby mortgage interest will be paid by them after 13 weeks instead of the current 30 weeks.

3. Interest rates have dropped substantially - and look set to fall further. Anyone on a tracker or SVR mortgage will have substantial reductions in their monthly payments, which should make it easier to get out of arrears.

4. There is immense political will to avoid repossessions.

Gotta go and top-up my already half-full glass! :-)

Surely the RBS/Northern Rock 6 month delay is not there to really help but to delay the wave of repossessions until after the next election (if you take the 15 month repossesion process into account)? I am growing increasingly cynical about Brown's initiatives and don't doubt he will use the tax-payers bail-out of the banks to attempt to 'buy' the next election.

A six month delay is only a good thing if the house-owner is going to be able to pay at the end of it. If he/she isn't then its just piling on the debt for no good reason. The bank doesn't win, the owner doesn't win but maybe it does give a 21 month holiday until the pain hits?

Grrrrr

So Robert, 500 of a difference - very close!!!! Get real, it is the same as near as dammit but as long as your Lords and Masters of ZaNu Labour keep telling u lies u will keep spinning them.

Please TRY and be objective - the UK is bust BECAUSE of ZaNu Labour and no one else - tell the TRUTH, PLEASE, it will make a pleasant change.

Oh, has your source of leaks been identified, investigated, arrested, or groomed???????????????

"The government has been looking at ways to protect families from the trauma of losing their homes"

The problem is that it isn't "their" homes.

The homes are owned by the banks. And all these people have are long-term payment plans where they'd get to own the home if they are able to pay money for 20 or 25 years.

That's the deal they entered into and, as heartless as it may sound, it's the deal they should be held to.

If not - if the government plan is to pay the mortgages of all those who can't pay - then where's MY mortgage?

When are they going to buy me a home?

my parents should have had their house repossessed in 1991/92 around the time of my father's first bankruptcy - it never happened. They then spent the next 6 or so years, fighting to pay the mortgage, interest and arrears etc which was always going to be a loosing battle. Eventually in 2000 it got repossessed and it was the best thing that could ever have happened.

The sooner that people are put out of their debt missery the better for the whole economy and hopefully will allow us all to move forward from this mess.

It's not just when but how they repossess. My flat was valued at £132k and I received an offer for £118k - but the Halifax wouldn't give the time for the sale to proceed. I even offered it to them complete with buyer but they repossessed then came up with a valuation of £96k meaning they got their money but I got nothing. They sold it to a developer who sold it again 3 months later for £140k. Corrupt or what?

A lot of sense in these posts:

1) Where is the help for those who have been priced out of the bubble -- assuming that GB and AD are doing their damnest to keep prices overinflated.

2) Why is it fair that those with cash savings see them withering away by inflation and the collapse of Sterling?

I can only think that achieving the ideal of home-ownership is so useful that politicians want to keep it alive at all costs. Don't worry about shocking public services and inequality, work hard and maybe one day you can own 50% of a home, and pay rent for the other 50% to some investor.

Hmm. As much as I hate the govt, and I do...
There are far more house and indeed people/households than last time.

To match the last recession propotionately my guess is that the number would have to go to nearer 90,000.

Having said that, it mose likely will, the source you quote has say in the market and would no doubt publish its conservative estimate.

Elsewhere today, the bond markets are suggesting another leg down to the credit crunch.

#20 JavaMan1984

#24 wineguru

Thank you for adding the further information.

I had only enquired of the CAB today on behalf of a young woman living alone.

I was only given the info in post #2 and then they rang back to correct the first info I had been told. An Australian, I think.

One would think it would be an FAQ at the moment.

So what will happen to the 75,000 (plus) repo homes when no mortgages are available?

This will get far, far worse than the 90's.

The number of people on interest-only mortgages with high LTV's is huge - interest only was rare in the 90's. As the equity disappears, they will hand back the keys, take bankruptcy and re-enter the market, debt free, in a couple of years. Tag on 100%+ mortgages, plus those unable to pay because of job loses (the worst of this will await 2009/10). Then add in the BTL brigade of amateur landlords, who will see rents head south because of over-supply and be unable to pay the mortgage, the ex-council house buyers and the figure will be well over 100,000.

This policy of slashing interest rates will prove to be counterproductive and ruinous.

Those people heavily in debt are not going to spend more, as their credit is almost certainly exhausted already; it might make the repayments eat the capital marginally faster but that is all.

Small firms are still unable to borrow unless they are creditworthy and should not be borrowing further if they are not.

Savers who have cash in the bank are forced to spend less or will be withdrawing capital to maintain their standard of living, decreasing the bank’s ability to lend. The whole will be a vicious circle.

If those who are already insolvent are permitted to borrow further, the ensuing bad debts will put the banks in a worse situation than now. Permitting mortgage interest to accumulate further in a falling market will exacerbate and accelerate the problem. Either total stagnation will ensue or catastrophic falls will occur as the inevitable repossessions and forced sales mount after the phoney truces expire. Taxpayers cannot pay forever increasing amounts without drastic cutback.

Brown and his glove puppet will bankrupt Britain. I suspect Brown’s desire for fairness is behind it all, but is it fair that the prudent are destroyed so we are all equally destitute?
(Apart, of course from those on the state’s payroll)

BBC Breaking News!

'MPs furious that repossessions will top 45000 this year!'





Sorry. I misread that. Here is the Breaking News again:

'MPs furious that Police entered the House of Commons without a warrant'



GC

Repossessions up 12% and nobody came...

In the beginning of this crisis I felt strongly that the banks had been irresponsible in their lending practices and created this mess.

Since then my attitude changed after I realised there are a lot more "won't pays's" than "Can't pays".

When we think reposession - we often think of an unlucky person or family who have lost their income through no fault of their own, and who despite their best efforts cannot manage to keep the creditors at bay. They didn't borrow irresponsibly and they are just like you and me.

...the true picture seems to be a long way from this. Even when the BBC tries to pull the heart strings of the public the truth is often very different. I have found numerous examples of hard luck stories which have turned out to be quite the opposite. A bit like my neighbour who lives in an identical flat to me, and yet bought himself a Porsche Carrera about 2 years ago subsidised with money borrowed against his house. He's since had to sell it (at a cut down price) and s now facing reposession of his flat. I drive a much more prudent car and I certainly won't be reposessed this recession. How he smirked at me in my beat up car for the last 2 years - but who is laughing now.

Secured loans taken out on the property (with no mention of what the money was for, or what actually happened to it), Landlords who take advantage of our Limited company rules and re-mortgaging to pay interest or buy a new car, LCD screen etc.

So please - Don't believe the BBC or any other media source crying about the number of reposessions - MOST OF THEM HAVE DESERVED IT.

If you disagree - lets hear some real hard luck stories where it's no fault of the reposessee - I'm waiting....

When me and my partner applied for our mortgage 2 years ago (at the top of the housing boom) it surprised me just how easy it was to get our hands on a ridiculous amount of money.

At one bank, which incidently seems to be in the most trouble, we were offered 6 times our salary - I'll repeat that - SIX TIMES OUR COMBINED SALARY. With no motivation to put down a deposit.

Fortunatley, we have more prudence than GB and AD put together, and we had a sizeable deposit, we had decided to borrow no more than 3 times our salary and made sure we could pay all our bills if only one of us could work.

What this does highlight it that banks ARE equally to blame as much as those who took our crazy mortgages.

... also not everyone who bought a home in the last couple of years were jumping on price boom bandwagon, some of us actually saved hard because we wanted somewhere to raise a family.

Repos should be going down this time around not up!

Why?

Because to the credit of the Government they have in fact a correct policy now in place. What is this?

Basically from January 2009 if you are unemployed and claiming JSA then the Gov't will pay the mortgage funder the interest up to an equivalent of a £200,000 mortgage after 13 weeks. It's called ISMI.

Most lenders will no repossses within 13 weeks and after that the Gov't will take over. Most mortgages are below £200,000 too.

Until the pre-budget report an ISMI payment was effectively capped at £100,000.

I disagree with Gov't on many issues but when you become unemployed because of the Gov't's mishandling of the economy it isn't fair that ordinary people should bear the brunt of this failure.

There is on eviction that I can't wait for and I think you can all guess who! And that eviction will be well deserved and can't come quick enough for the monumental errors of policy over the last decade!

The percieved wisdom by many on this blog is house prices will fall much further. This could be true but I also think it is worth considering that building cost are £100-£120 per sq foot in all regions of the UK. The land price can fall of course but it is unlikely to fall far as most people need to live near to they place of work hence land for new build is in short supply near and in large cities. It is worth pointing out also there are not a large number of un-occupied properties in the UK, with the current down turn in construction there could very well be a large shorfall in the not too distant future.
The buy to let market seems to be particulary resilient so it is unlikely the market will be flooded if fact as many young people prefer to rent than buy at present it is unlikley to alter.
I am afraid the many people who are hoping for the buy to let landlords will suffer will be disappointed they on the whole have plenty of equity in their properties and the rents cover the mortgage, infact with falling interest rates it still a much better place to invest than the stock market.

Another joker out of the pack from Brown.

He obviously has just seen the projected repossession figures you've just quoted.

Who is stupid? Him or us for wanting to believe he is doing something for those who could lose their homes if they become unemployed.

They will be worse off under this new proposal.

At the moment after thirteen weeks their mortgage interest would be paid on and up to a 200000 pound mortgage until they resumed work.

Under the new scheme this interest would be deferred for a maximum of two years and presumably added to the mortgage thereafter.

He has obviously seen the figures for the initial proposal and taken fright.

Like everything else it smells good on the surface but underneath it positively stinks.

Re: #4
Well said, I have previously suggested this move on a previous blog,as all that money would be freed up for six months & it will stimulate the economy.
I even sent the suggestion to Mr. Darling !!!

Hang on, if you're living in a house that you can't afford then you should move to a house that you can afford like everyone else. That's the best thing for everyone in the long run, and will also help house prices fall to a more sensible level.

Why on earth should taxpayers money go to help someone living in a house that's beyond their means? I don't live in a mansion for 1 simple reason - I can't afford it.

Why should it be different for anyone else?

So it seems that yet again as a person desperately trying to save a deposit for my first home I will be hammered for more tax to pay for these schemes to help those people that borrowed to much and spent even more.

here we go again, those who have been profligate and over borrowed get my hard earned tax to subsidise their greed...i have been prudent, saved hard, paid off the mortgage, pay the credit card in full each month, never claimed a penny in benefits, and the only reward i get is to see my savings devalue by the day

Hi Robert

RBS

Very concerned at the state of RBS balance sheet.

RBS Liabilities- £1.6 trillion
RBS Assets - £1.73 trillion
Net assets of approx 60 billion

Included in these net assets is approximately £62 billion of unrealisable assets ie. intangibles, prepayments etc. meaning net liabilities of £2 billion equals insolvent.

This net liabiilty can only be increased when further provisions are made against RBS' corporate debt, credit card debt of appproximately £700 billion and losses on derivatives of £500 billion.

The Government investment of £20 billion can only help to shore up RBS' balance sheet . To enable the bank to recommence lending perhaps an investment of £200 billion would be more appropriate!!

However recapitalisation of RBS or any other business should only be done when you have investigated the state of the company's affairs ie. balance sheet which should include a review of the quality and recoverability of the company's assets.

The extent and level of the government funding will not be known until this review is carried out.

The role of clearing banks must be redefined and the rules, regulations and code of ethics governing those clearing banks must be rewriiten.

The problem with BTL landlords being repossessed is that the tenant may have been dutifully paying the rent in full and on time for all the proceeding months, unaware that the landlord has been using the money to pay their own mortgage and not the BTL one.

The tenant is still turfed out regardless. I suspect we'll see calls for better tenant protection as BTL repossessions increase.

here we go again, those who have been profligate and over borrowed get my hard earned tax to subsidise their greed...i have been prudent, saved hard, paid off the mortgage, pay the credit card in full each month, never claimed a penny in benefits, and the only reward i get is to see my savings devalue by the day as i receive an interest rate well below inflation.....when are we savers going to get Gordon Brown's "fairness"?

I see the Government have cobbled together yet another scheme whereby up to 2 years missed interest payments can be bundled up and added to the principal, underwritten by the Govt. But wont this reduce the flow of funds into the Banks over the next 2 years and thus further reduce the amount opf new loans they can advance?

Let's see. At 2.38pm you post that:

"The government has been looking at ways to protect families from the trauma of losing their homes when a breadwinner loses his or her job."

And at about 4.00pm GB announces new protections for the taxpayer to guarantee deferred interest on a two year get out of jail card for defaulting mortgage payers.

No chance that was leaked, then? Just a coincidence no doubt?

Aye, right.

Oh, and by the way, more taxpayers' money down the drain.

TheresOnly1Soupey -


It incenses me that and so many others you can write in that condemnational and generalised way hiding behind a pseudonym.

Why exactly should a person - in the case you cited - NOT use his house as 2nd charge security? How about a businessman, say in a retail sector? It is (was) perfectly normal practice to remortgage to raise capital. Is he now a fool for doing so?

None of you who condone repossession etc get it do you? If the Government strips away the stable fabric of the economy - everything is going to go out of balance - oer-borrowing has no meaning because all borrowing suddenly looks hugely risky. YOU may have had second sight that predicted the chaos that overtaken so many people and firms. Most, sadly, did not.

You'll tear the country in half, mark my words.


GC

I have read a lot of inconsistent stuff on this Blog today, we need to get some facts straight.

1 - The credit crunch, although assisted by the incompetence of the banks, was ultimately caused by YOU - the public. You borrowed all that money - didn't you think you would have to pay it back? Did you really think interest rates would never rise again? Did you really think house prices would rise forever? Did you think it was a good idea to extend your mortgage to buy a devaluing asset (car, TV, stereo etc.) - seriously people what did you think - or is that the answer - YOU DIDN'T THINK BEYOND THE GREED AND DESIRE TO BEAT YOUR NEIGHBOUR IN THE RACE FOR COLLECTING 'THINGS'.

2 - Those who have been cautious will not suffer and will not have to help out those who weren't cautious. I have been cautious for the last 6 years and I'm laughing now. This fake story is put about by the media so we all have something to moan about in the pub.
My building society has called and written to me 5 times in the last week - why? Begging me to change my mortgage product - I am on a base rate tracker with no bottom limit. I know that they are having to borrow money at a higher rate (LIBOR) than they are lending to me (BoE + .3) - TOUGH. Now the shoe is firmly on the other foot - GOOD. If they continue to write - I'm going to start charging them for processing the letters!

3 - The banks who suffer in this crisis - DESERVE IT. Lets just remind ourselves these are the same people who are in court at the moment trying (and failing) to justify excessive overdraft fees. Lets also remind ourselves these are the crooks who feel it's acceptable to charge someone £2 to withdraw £10 from a cash machine - because they only put free machines in posh areas. I have no sympathy for any of them.

Lets not fall into this Media trap - the majority of those who will suffer created their own problems, the banks are not our friends and never were, Government will do whatever it thinks will make it popular and the media will continue to wind up all parties with inaccurate and incorrect stories until we tell them to shut up and go away.

"The king of fools is still a fool - even though he is king"

#43

Your point well made regarding BTL. The local councils are desparate for rental property and only to happy to pay the rents on them. Only landlords likely to get into trouble are those that refuse DSS which is silly, as not all DSS recipients will feel the need to trash the property and indeed are no more likely to do so than 'regular' renters.

Having survived the 90's, if you show that you are attemting to make payment, even if it's not the full amount, the courts are unlikely to reposes. It's those that make no attempt at all that wind-up losing the keys.

#42

But ordinary people are bearing the brunt. Who do you think pays the interest?

Taxpayers.

That'll be ordinary people, then.

#43
On the right track, but not there yet.
A market should reflect the true value of its commodity, correct - anything more's a bubble.
However, comparing rebuilding cost with used state still overstates the market value - given two identical properties, one a hundred years old and one two years old (ie de-snagged), the newer should have the higher value.
There's therefore a way to fall yet before it becomes over-sold, presuming the perfect funding market.
However, the US still hasn't cracked the credit gap, so that again may drive things lower.

Looks like the headline is now made redundant....

Again the 'experts' proved wrong. This time it took just a few hours.

In the summer we were told oil would reach $200! It's now around $50.

Seems that the mess we're in is mostly due to 'experts' getting their forecasts wrong.

Of course we can blame the government, but it seems Team Gordon are actually spending their time fixing the problems that the speculators, fund managers and accountants got us into.

Perhaps time to see things from a new perspective so the news 'hedges' the predictions a little better?

I really wouldn't be so sure that buy-to-let mortgages are safe.

Back in about 2005 I saw a property that I thought might make a good rental investment, so went to talk to the estate agent about it. The one I liked the look of had sold, but the agency had a couple of others. The trouble was, the figures just didn't add up. Even with a 25% mortgage the rent wouldn't quite cover the mortgage and that was assuming ongoing occupancy with no dead period. It also doesn't include the costs associated with owning the property - maintenance etc.

When I asked the estate agent why I'd want to pay someone else to live in my flat all she could do was assure me that I'd benefit from price appreciation. I declined to take such a gamble, although I'm sure others were more confident in their "knowledge" that property prices only ever go up.

A lot of people bought into the lie, and they are really going to suffer.

BBC editorial policy update:

Make sure you get line about 'nearly as bad as 1991 peak' in first few lines of any report on this subject.

I have some sympathy for people who are struggling to pay their mortgage because they have been made redundant, but a lot of the people that are facing repossession have simply taken on a mortgage which is too big for them.

People do not have an automatic right to own their own home. If they have taken on more debt than they can manage then they should lose their house and find accommodation that they can afford.

#48 jolo13

How can people being repossessed be described as 'greedy'?

Seems that you've paid off your mortgate, got savings in the bank and in an excellent position!

Shame on you wasting your hard-earned life moaning and whinging about those less fortunate than you.

Glad it's not a quality many people have these days. Most of us like to rally round and help each other. A positive attitude might help you enjoy life a little more!

#50 Ralph

"The tenant is still turfed out regardless. I suspect we'll see calls for better tenant protection as BTL repossessions increase."

Excellent idea! Perhaps tenants could pay their rent straight into the bank and the bank can pass on the excess back to the landlord.

It could be an extension of the Deposit Protection Scheme introduced by this government looking after the interests of tenants.

Well, if the Gov't stopped pretending Inflation was 2% and accepted it was actually nearer 12% it would be an improvement.


My rate of Inflation is actually 10.5% at the moment.

So a pay rise of ten percent would match Inflation and inject demand back into the economy.

The Private sector is incapable of pulling Britain out of recession all it is doing is sacking workers and battening down the hatches.

SO a pay rise for the Public sector of say 10% is the only way to get people spending again.

Of course the Pound is headed for Dollar parity.

And much less against the Euro.

The financial house of cards held up the UK exchange rate, and now the cards have fallen so too will the value of the Pound.

No more dodgy Bankers to keep the Pound flying high !

Expect much more expensive holidays, and much more expensive imports.

Thats if you have a job of course.

#52 Chivalrous

"But wont this reduce the flow of funds into the Banks over the next 2 years and thus further reduce the amount opf new loans they can advance?"

No it won't because the banks won't have to capitalise the deferral.

Effectively the Treasury (taxpayers) are underwriting the loans guaranteeing the bank will get its money.

It's an accounting thing and good practice helping keep people in their homes.

Repossession is a costly wasteful process that hurts everyone.

Watch 'It's a Wonderful Life' for a beautiful dramatisation of how good social policy benefits us all. It's a great Christmas movie anyway :)

What exactly, does Britain export anymore ?

No 5 above has some good sense in opening a Euro account.

The Eurozone at least has Germany, a manufacturing powerhouse.

Mind you Europe has Spain and Italy as well.

How is Santander, RBS partner in the ill timed overpriced ABN AMro takeover doing ?

How is the Spanish property crash going?

A lot of expat Brits are caught up in that too.

Oops, in post 60 I meant to say a 25% deposit! If only I'd had the cash to put up a 75% deposit the figures would have looked very nice indeed.

TheresOnly1Soupey

You asked for a genuine hard luck story.

Read no 24 yet?

Not everyone borrowed 4 or 6 times their salary - yes I'm p*ssed off that they did it too, but they only borrowed the money because the government didn't stop them, and I'm not about to start insulting people for it.

TB and GB figured out that people didn't really care what was happening as long as house prices were going up. The fact that prices cannot go up forever without rampant wage inflation and/or an eventual crash seems to have escaped their notice.

As for my original post 1. These are the days.


Thanks Gordon, do I just build up arrears or do I let you pay the tab for 2 years and then start repaying?


You have my vote in May mate, I might even go and buy something to celebrate!

Cheers

People who live beyond their means deserve to lose their lifestyle. Why does this government insist on helping the greedy. Has Gordon Brown ever heard of a chap called Darwin?

It is crazy.

A family of four repossessed from their family home are now in a buy to let owned by a previous neighbour still in his own home, whilst his buy to let's rent is paid by the government welfare office on behalf of the family.

Good to see the repossessed family housed but would'nt it have been better not to subsidise the speculator but to support the family in their repossessed home.

As I said, it is crazy.

The latest bird-brain idea from Brown has taken us from the sublime to the ridiculous. He, and to be fair the rest of the political and economic establishment, continue to ignore the real cause of why we are in this mess, i.e. that years of borrowing has created unsustainable asset bubbles that have no option but to readjust back down to normative levels, i.e. crash.

The result will mean that many businesses will be declared insolvent, many people will lose their jobs and, as a result, their properties. Brown and his fellow chimps are making the false assumption that we are entering a short, shallow recession and that things will start to pick up shortly and everything will just return to normal, i.e. free-flowing credit, ever rising house prices, consumerism etc. Sorry, but it won't because it can't. There is not enough money in existence to pay off the amount of debt out there.

The Council for Mortgage Lenders are estimating that there be 75,000 repossessions - these are the same monkeys who 18 months ago couldn't conceive of there ever being a crash. Thus, these figures are utterly unreliable and completely over optimistic.

I would suggest the true figure is likely to be considerably over 150,000. My rationale is simply that without the credit bubble we have no economy. Most who bought properties over the last decade have no money to fund their over-priced homes. This is merely delaying the inevitable and stifling the market from a necessary correction.

I believe now that there will soon be a run on the pound as anyone with any brains can see that the UK is acting like a gambler with extensive debt - believing that they can just continue borrowing and win back their loses, rather than lose the lot.

#63 mynewsreview

people are being repossessed because they cant keep up the payments on the contract they signed, therefore they took on a commitment beyond their means. now of course you will say that circumstances have changed, well they should have thought about that when they took on the mortgage.
once again it is the careful and thrifty who have to bail out the spenders. I came from a working class home, worked hard for thirty years, employed twenty people, paid taxes and my reward...bail out those who have been profligate. It is true i have paid off my mortgage and i do have money in the bank, is that a crime, should i have just spent it all on the fripperies of life and sat back to let the taxpayer look after me?....the problem with this is you need people like me to pay for those who refuse to take responsibility for their own lives.

Thanks Robert,
More analysis please ... you fail to mention how Govt words are not matched by their totally muddled actions.
Consider:

#1 Sept '08
Govt announces from April 09 new Jobseekers to qualify for Mortgage Interest Support (MIS) on GPB175k home loans (now only GPB 100K) after 13 weeks (now 37 weeks!)

#2 Pre Budget Report (Nov '08)
Title: Helping People Fairly
Ooops ... second thoughts ... home loan limit raised to GBP 200K.
Govt says will maintain the level of support at the current interest rate for next six months i.e. DWP uses Base Rate + 1.5.

#3 Queens Speach ..New Bill
Ah, better do more ... set up a 2 year mortgage holiday scheme with just 8 lenders on loans up tp GBP400K

Please ask Crash Gordon ..
MIS improved April '09! Why no urgency?

Why ignore the fact that 51 per cent of the UK's 11.7m mortgages are fixed rate?

NB Recent BOE rate reductions have cut mortgage benefit paid by DWP by 44 per cent from Oct levels!!!

So, if you have a fixed rate deal, tough, you're now in arrears and on the road to repossession!

If this is Gordon Helping People Fairly, God help us if he decides to get real mean!!

wow - it's getting really nasty here.

GC

Repossessions up 12% and nobody came.

"when you become unemployed because of the Gov't's mishandling of the economy it isn't fair that ordinary people should bear the brunt of this failure."

The thing is, ordinarly people *will* bear the brunt of this failure if the govt transfer these mortgage debts from the "owner"/bank to the tax payer.

There was a lot of bad lending and the government can't reduce that with a stroke of a pen.

All they can do is transfer the liability from one party to another.

By sticking the tax payer in the middle of a contract between a person and a bank, they've put us all on the hook for the outstanding money.

So, we'll end up with situations like this:

18 months ago, someone bought a flat like the one I live in. (I rent)

They'll have gotten a 100% mortgage (maybe more - "No savings? We'll not only buy you a house, we'll lend you extra some money on top of that, just for being our customer") and a special deal where the payments are low for 2 years.

They were probably paying less than I was paying in rent... and, they've every intention of remortgaging to a new introductory rate after 2 years.

They think I'm a mug. I'm happy to rent because I think they've paid top dollar.

After 2 years is up, they can't remortgage because they've negative equity - and still no savings - and they can't keep up the installments on the house.

So, GB/AD bail them out with a 2 year mortgage reduction period.

They're still paying less than I'm paying for rent.

After that 2 years is up, if house prices haven't rebounded, they walk away.

Result: they've had 4 years of low rent and they don't own a home anymore.

Muggins here has had 4 years of regular rent and doesn't own a home either.

(plus I've got a huge chunk of national debt hanging around my neck in return for helping them out)

Alternate scenario: after 2 years house prices are back up at 2007 levels and they've ended up with a stake in an appreciating asset, without any real risk.

... and, yet again, I'm a mug for being debt averse.

'triffic.

P.S. This 2 year reduced mortgage period, isn't it just going to break the banks?

If the banks are going to be the last people to get paid when someone is going broke, won't they just end up losing more money per repossession?

(especially if house prices keep falling over the 2 year period)

I've got no sympathy for the banks. But, what's the point of bailing them out with taxpayer money and then forcing them to operate policies that are going to bust them again?

Either kill them or save them.

73 you are soooooooo out of order!

Murderers deserve to lose their lifestyles, not the unfortunate that lose their jobs. What is a lifestyle anyway?

I suggest you get yourself some humility and hope this is not going to get so bad to effect your lifestyle matey because evolution will prove that this fake infusion of money to support capitalism only ever truly supported the few.

Under Darwinian law you are a dinosaur and therefore your fate will be sealed also.

Personally, one day, I would like to own my own home. I'll be very glad when everything gets back to long-term averages. To be fair though, at this moment, for any house at all to be affordable to me it would have to be a maximum of £39,000 That is a very very very long way below the current average price, even where I live.

A lot of people have struggled to buy in the last 3 years - one person I know is currently paying a mortgage on a 96000 house, with her and her fiance's salaries of 28000 combined. They got a 100% mortgage and are really struggling to refinance. But if you consider that they're actually paying the same per month as the average rent for a comparable house, it seems a bit silly to pay rent for a temporary roof rather than a mortgage for a permenant one.

I think the reason so many people want to buy is that it is misery to rent - often stuck with someone else's idea of taste, always with the spectre of eviction hanging over you, rarely any space or permenance to raise a family, landlords I've had in the past have shown other people round the flat before asking whether I was planning on staying (so random people interrupting the day), and, not least, the fact that your home is not yours.

I can understand perfectly well why so many people bought homes when the prices were clearly so inflated - where else would you live to raise a family? a council house?

#76 jolo

You've done really well in life. I'm sure you're proud of that and couldn't have done it without a positive hard working attitude.

I'm sure you've reaped the rewards of life as a result.

Perhaps not everyone is a smart, or prudent as you. Perhaps others are more smart and more prudent.

Not sure what you're looking for? Do you want people to be punished somehow for not being as clever? Don't you think the hardship they face is misfortune enough?

Having your mortgage covered isn't like winning the lottery. No holidays, no new car, eating out etc. Life will be tough.

Perhaps that will teach them and their kids to be more careful in future. Throwing them onto the streets won't do much apart from cause resentment and further harm the economy.

I'm proud to have a government that puts the interest of all about the interest of the few. They are being really creative in how to solve these problems. The Tories seem to just batten down the hatches - and say I'm Alright Jack

75:

I feel you are being most unfair on Chimps.

I do not know any Chimps who organise their Society into complicated non functioning behemoths.

The Chimps I know of, get their Bananas, and eat their Bananas.

Very simple.

Mind you Humans do come along and repossess their Jungle from time to time.
Sell them to Zoo's , Laboratories and sometimes to Circuses.

Why does the Gov't not just Nationalize repossessed Houses at a fair price and use them as Social Housing?

Problem solved and no one has to go Bananas trying to sort it out.

Back to the Jungle !

It's interesting that Communism failed over in the USSR.

And now Free Marketism has failed in the West.

Or is it just the People managing the economies who have failed?

Back to a nice sensible mixed economic model!

Now which Party can tell me how we will rebuild Britains manufacturing base?

No. 75, you obviously like insulting monkeys

'There is no economy without the credit bubble'

so true..... The CML had house prices rising by 'only' 5% through 2008 too. It ISN'T going to be a shallow recession at all....it could well be 300,000 or 500,000 given the comparison with the thirties.

Which is why, given that we are really in the Brown stuff, we must stop being more compassionate that we can afford to be. Hyperinflation and a ruined currency are just as much, sure fire recipes for riots in the streets.

Public Sector workers should go on a spending strike until they get a realistic pay rise.

Don't settle for less than ten percent !

Company Directors wouldn't settle for less!

80

Confusing, you do not approve of Capitalism but do approve of Darwinism?

Free Marketism is about law of the Jungle survival of the fittest ( ie raw capitalism).

So are you more Communist or more Capitalist in outlook ?

Or do you believe that survival of the fittest (Darwinism) will result in a new form of Gov't?

Gov't to me appears to be more survival of the luckiest at the moment !

81

''I can understand perfectly well why so many people bought homes when the prices were clearly so inflated - where else would you live to raise a family? a council house?''

What do you think is wrong with council houses? Many are built to higher standards than the fake wooden framed golden bricked ESTATES that people like you bought in the hope of reaching your vista.

You confuse the use of subsidised rental housing with many of the people that are provided with them as a way of getting something for nothing.

The system was manipulated that way to discourage ''upstanding citizens'' from even applying for this housing and anyone that could actually afford to pay the rent to either purchase this housing. When the sheer numbers of people needing this way of providing a roof for their families meant the councils could not sell off further stock, those people were provided with lucrative handouts to 'move' into mortgaged properties. These handouts averaged 25000 per family. I was a beneficiary of such a handout.

You need to understand the manipulation at hand here to encourage home ownership, markets to support price growth, banks to support realizing equity to spend. The economy flourishes as a result and bingo - the nation does not rely on any other production other than fake cash.

There are many. many families in council accommodation that are saying to themselves, there by there by the grace of god right now.

# 51 jolo13

Yep, that's about it. It's called socialism (redistribution of wealth) and we voted for it a decade ago. Now we'll spend two decades paying for it.

Twas ever thus. For as long as we insist on voting in Labour governments, they'll grind the economy into the deck to fund their idiotic notions of social justice until some other hapless party steps in to fix it all over again.

The only difference this time is that the Tories are as clueless as the Labour lot. So, it's anybody's guess who will eventually step up to the plate on this occasion. This time around it'll take a generation to fix Labour's shambles which has been a spectacular failure by any historic measure you care to choose - and even then there's no guarantee that the UK will ever regain its world economic status; indeed, it's very unlikely.

Some legacy for Supreme Leader Brown eh?

87. At 6:21pm on 03 Dec 2008, supercalmdown

Please do not confuse subjects you obviously believe have an affinity.

Free markets are only free from interference - is there any interference in the markets?

Survival of the fittest - are there any animals out there that should be extinct?

When a population are falsely secure in their warm houses with tescos finest food they forget the people on breadline and that their survival is not based on nicking a carrot because they will be arrested by the anti terrorist squad and put in prison!

"I've become a bit wary of the Government's claim that the eight biggest banks have backed the mortgage-guarantee scheme, having spoken to a couple of them.

They're not prepared to attack it in public. But they're not sure it will have much of an impact, unless they are strong-armed into keeping the genuinely feckless in their homes - which the banks feel would be a bad thing."

I appreciate that you are a business reporter, not a political one, but what would be your reaction to the government claiming something that proved to be blatently untrue, such as the support of the 8 banks? Not merely your reaction to the specifics of this incident, but whether you think, in general, that government deceit is just part and parcel of politics. Or whether you think that government announcements should basically be expected to be honest.

Thank you.

#40
you obviously never read post 24

Supercalmdown

We must presume that you yourself are employed by the public sector. Let's guess...jobsworth in the local authority...typified by your relentless whinging for a pay rise.

Public sector workers are supported more than enough already by the other tax payers. Who on earth do you think props up their pensions!!!! Good grief, give them extra pay!!

I heard a rumour they will introduce a blogging and freedom of speech tax.. actually I made it up it was no leak

Re: 91 it makes sense for banks to back the scheme if they invested in REIT's (Real Estate Investment Trusts) which have certain tax breaks

#46. soilysound wrote:

"Hang on, if you're living in a house that you can't afford then you should move to a house that you can afford like everyone else."

So lets say you are living in a house worth 200k and you're mortgage is 1,800/month and you move to a house valued at 150k with a mortgage of 1,500/month.

Do really thing someone is going to pay estate agents, conveyancing fees, HIPS, building survey new property, land registry, stamp duty, mortgage arrangement fees and removal costs (lets say = 15-20k) i.e. 4 years 'mortgage saving' to save themselves 300/month on the mortgage? In the old days, they addded these costs on to the mortgage, but those days have gone.

Before you ask, the figures above aren't mine, I'm fine I have an outstanding capital repayment mortgage of 1.5 times combined income and at least 60% equity.
I actually want to move for job reasons but am waiting for prices to drop all round so I don't have to shell out so much to all the parasites in the process.

#68 supercalmdown

"What exactly, does Britain export anymore ?"


WEAPONS

54

Guy,
The plain and simple fact is that too many people take out second charges to purchase devaluing assets.

Whilst I have no objection in principle when someone uses their property to raise capital - they do so with the knowledge they are taking a risk with their most prized asset.

By you contra-argument, we should hang around the bookies looking to give our money to people who lost out on the 3:30 at Kempton.

The problem never is with the prudent people who raise cash through a re-mortage for a sensible purchase or investment.

If they go bust - TOUGH, you should be thankful we have lenient bankruptcy laws in this country.
If they loose their house - TOUGH, only a small minority of people will loose their house because they were genuinely unfortunate.
Look at the story above - #41 A prime example of someone using their brain. Sure they were offered multiple times their salary mortgage, not encouraged to put down a deposit - but they listened to their brain, and were not greedy, and as a result they wll be able to ride this one out.

I run a small business, but we won't suffer in this recession because we haven't fallen for this 'expansion and growth is all good' rubbish.

The business grows, but naturally. we don't need to borrow huge sums to make it grow twice as fast - that's just greed I'm afraid.

Bigger is not always better - the US has proved that.

I believe the govt is being reeally considerate. Maybe too late for some who have already lost their homes.

#71 - edixon

#24 says "there are no jobs out there so I have had to start again freelance self-emloyed"

...well there's the first problem - there are jobs out there, just not ones that will cover the cost of the debt that he or she racked up.

When I took my mortgage out, despite being in a stable and well paid industry (at the time) I calculated that I could work stacking shelves in ASDA and still make my minimum mortgage payment. I also paid lump sums off the mortgage to increase the equity while the going was good (the last 5 years)

....that's called living within your means - planning for the worst.

I also don't believe #24 cannot get benefits. I know a house where 1 person is a wage earner and the other isn't - they get family tax credits to assist.

I would also argue that to run a business for 18 years and not have anything to show for it except a load of debt - then they should have realised it was a waste of time. It's hard for people to stomach but the business simply couldn't be viable. Unless I mis-read the rules of capitalism then you don't run a business to 'employ people' you run it to make money (I'd like to point out that I don't agree with the rules, but that's what they are)

You see the problem is that 80% of the population of this country are quite happy to make hay while the sun shines, but when it's gone and they realise the folly of thsie actions they want the rest of us to bail them out.