I saw Michael Moon reading the Times Literary Supplement on EastEnders.
The Albert Square newsagent started stocking The Spectator. A sign of East End gentrification to match the 12% increase in asking prices in Hackney over the last year (according to the Rightmove house price index).
And for the first time in the 24-year history of the General Certificate of Secondary Education, the percentage of candidates awarded an A fell. Cs went down, too. GCSEs getting harder? I thought it was only a matter of time until they’d start dishing out a pass with every Happy Meal.
But it was the latest stats on arrears and repossessions that really knocked me for six. The CML said the number of mortgages with the highest levels of arrears increased to 28,300 in the second quarter of 2012. The number of people owing more than ten per cent of the loan balance has now doubled since 2008.
Yet, at the same time, the number of mortgage repossessions declined. At 8,500, the number of repossessions in the three months to June was the lowest since the final quarter of 2010, significantly less than the total of 9,600 repossessions in the first three months of 2012.
The outlook for the economy’s gone down the u-bend, serious debt is up the swanny – and repossessions are down? You don’t have to be an accountant or a lawyer to see what’s wrong. Any broker can tell that this is secured lending madness.
I think I’ve figured it out.
Mark Blackwell of mortgage and property data specialist xit2 said lenders’ policies have been overly generous and have stopped the growing block of borrowers in serious arrears from becoming repossessions.
Blackwell thinks lenders can’t go on like this and that repossessions will increase is a result.
This makes sense.
Repossessions will inevitably rise as banks raise standard mortgage rates. Santander increased the rate for 400,000 borrowers recently from 4.24 per cent to 4.74 per cent following similar increases by Bank of Ireland, Halifax and Royal Bank of Scotland’s One Account. Many homeowners paying these rates have little equity and cannot switch deals.
Until now, lenders have been spreading the pain as a result of Government pressure and partly because house prices have not collapsed.
As consumer confidence calls, spending stalls and growth dries up, that cannot continue.
