The field agency business has revealed that 57% of homeowners included in its Domestic Arrears Report so far this year, promised to pay back at least some of their defaulted debt to lenders. This compares to 49.8% during the whole of 2011.
Niall Gilhooley, Chief Executive at Ascent, said:
“These latest figures paint an extremely positive picture overall and illustrate that despite very tough economic conditions, homeowners are fighting hard to retain their home and are willing to work closely with their lenders in order to ensure this happens.”
Ascent launched its Domestic Arrears Report in 2009 to analyse trends in defaulted mortgage debt. The study, which now includes data from almost 27,000 households across the UK, incorporate Ascent’s ‘Default Debt Paid’ index - a figure which illustrates the proportion of homeowners paying back at least some of their defaulted mortgage debt.
Since the previous recession in 2008/09, Ascent’s DDP index has risen gradually from a level of 37.5% to 57.2% in the most recent quarter.
In addition to an increase in the number of people paying back at least a proportion of their mortgage arrears, there has also been a significant rise in the proportion of homeowners paying off all their outstanding defaulted debt. In 2009, just 1% paid back all the debt they owed whilst in the most recent quarter, the figure stood at 4.13% - the highest number since the study began.
Despite the report revealing the highest number of homeowners paying off all the debt they had fallen behind with, the most recent quarter did see a slight fall in the DDP figure. During Q2, DDP was 60% but during July, August and September it fell to 57%.
Niall Gilhooley added:
“Although the most recent quarter saw a slight dip in DDP compared to Q2 of this year, debt repayment can often be seasonal and it should be viewed positively that the latest Q3 figure was 5% higher than in the previous two years. There are other positive signs, such as the high number of people who have paid off all of their outstanding defaulted debt in the last quarter as well as the 70% who still accepting debt counselling.
“The recent fall in Q3 may indicate that levels are flattening out at around or just below the 60% mark. Even if this is the case, it is important not to lose sight of how much progress lenders have made, certainly when they are compared to the levels of defaulted debt being paid back towards the end of 2009.”
A summary of the key findings contained within the latest Domestic Arrears Report include:
- Out of those households who agreed to debt counselling during Q3 of 2012, 57% made a contribution towards their mortgage debt arrears. 4.1% cleared their arrears completely – the highest figure since the study began.
- Out of all the households who had fallen behind with their mortgage, 70% accepted debt counselling. A year ago it was 68% and four years ago it was 52%
- The number of cases where no financial arrangement was made fell in the last three months compared to the previous quarter.
Home visits are carried out on behalf of most mortgage lenders after a household has defaulted on their mortgages. During the visit, or phone interview, counsellors discuss the outstanding arrears and aim to develop a sustainable and affordable payment plan for clearing the debt.
