mortgages

Mortgage default and repossession rates in UK

Mortgage default and repossession rates in UK

Home repossession – when banks take homes back into their own ownership, Mortgage arrears – when mortgage holders fall behind in their mortgage payments, but not necessarily leading to repossession For 2013, the Council of mortgage lenders anticipate a total of 35,000 repossessions. In Q1 2013, the rate of repossession is running at 0.07% or 1 in 1,400 homes. This is the lowest rate since 2008. (Source: CML) In 2012, 157,900 homes were in arrears. It estimated, that 160,000 mortgages will be in arrears of 2.5% or more by end of 2013.

Reason for Mortgage Defaults

Reason for Mortgage Defaults

Readers Question: What have been the drivers of the mortgage default rate in the 2008 recession compared to the late 1980s/ 1990s? Despite the depth of the recession in 2008, the mortgage default rate in the UK has  been lower in the current recession than in the early 1990s. The peak for home repossessions occurred in 1991, when over 70,000 homes were repossessed or 0.77% of outstanding mortgages. The peak in the current recession was 46,000 home repossessions in 2009. (0.4%) (more mortgage default rates in UK) 1. Interest Rates

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Falling Behind With Mortgage Repayments

Discuss the economic problems that might arise from large numbers of people falling behind with their mortgage repayments The problems of people falling behind with their mortgage payments include: Mortgage defaults will rise causing people to sell houses. If people are forced to sell houses the increased number of houses on the market will depress house prices. Lower house prices will cause a negative wealth effect leading to lower confidence and lower consumer spending. This will lead to lower economic growth. Banks Lose Money. If people are defaulting on mortgage payments, banks will…

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Student Guide To Mortgages

In the UK, there is a strong desire for people to own their own house. This deep seated desire is one of the factors behind the extraordinary rise in UK house prices. However, the cost of houses means that it is becoming increasingly difficult for people to get on the property ladder. To be able to buy a house, bigger and more risky mortgages are often being taken out. These are some of the pitfalls behind taking out a mortgage. Average house prices have increased faster than incomes. House Prices are…