Large Increase In Mortgage Repossessions

Large Increase In Mortgage Repossessions

Large Increase in​ Mortgage Repossessions
Recent statistics from the​ Department for Constitutional Affairs state that court actions by mortgage lenders rose to​ 28,​476 in​ the​ second quarter of​ this year – for those that don’t follow such trends that’s up over 50% on​ one year ago .​
Also,​ at​ 18,​330,​ the​ number of​ repossession orders was the​ highest for 9 years.
Although yet to​ reach the​ previous peak of​ around 40,​000 repossessions in​ the​ second half of​ 1991,​ this is​ a​ very worrying trend for homeowners and landlords alike,​ who have got used to​ permanently rising prices and historically low interest rates and borrowed against ever increasing equity either to​ fund a​ higher quality lifestyle or​ to​ pay the​ deposits on​ further investment properties .​

The massive house price inflation over the​ recent years gives lie to​ Gordon Brown’s boasts about his ‘low inflation’ economy .​
However the​ mock shock horror at​ the​ antics of​ yet another lying politician is​ of​ no importance .​
What is​ VERY important is​ the​ fact that it​ is​ consumer borrowing against this property price inflation that has kept the​ economy afloat .​
With house price inflation slowing,​ stopping,​ or​ going into reverse (depending on​ whose statistics you​ believe),​ people have nothing left to​ borrow against and are reaching their limits .​
Combined with the​ UK’s near total de-industrialisation and reliance on​ the​ service sector (which has little or​ no export value),​ this is​ going to​ have a​ serious negative effect on​ the​ economy in​ the​ near future.
So what does that mean for you​ the​ landlord? a​ sudden large-scale collapse in​ prices - as​ seen in​ the​ early nineties - seems unlikely to​ this author because there are still more people in​ need of​ housing than there are suitable and available properties; simple supply and demand economics - people will still need property to​ rent.
However if​ the​ economy takes a​ severe downturn,​ aside from other problems too complex to​ cover here,​ then a​ lot more people’s rent will have to​ be met by the​ government .​
as​ well as​ the​ obvious strain on​ the​ taxpayer,​ this is​ quite obviously bad news for those private landlords who refuse to​ take tenants who are claiming housing benefit .​
If you​ think about it,​ Housing Benefit is​ better than free property advertising in​ that there are a​ constant stream of​ takers and the​ cheques definitely do not bounce!
Those negative landlords are,​ as​ in​ every business,​ the​ ones that will find themselves being left behind the​ proactive landlords who have already opened their minds and embraced the​ income stream generated by tenants on​ Housing Benefit .​
Although there may be problems at​ the​ moment,​ the​ council is​ working very hard to​ overcome them and make the​ service all that it​ should be.

You Might Also Like:

No comments:

Powered by Blogger.