HSBC Watch News Release Forum Index
Forum Name: - Mortgages
Topic Title: UK Mortgage re-possession orders Soar
Thu Oct 27, 2005 7:42 am
This article, from HSBC's corporate location - London - shows how Household's model of piling on consumer debt can hurt a family:
Wed Oct 26, 2005 3:08 PM BST
LONDON (Reuters) - Mortgage re-possession orders in the third quarter (2005) soared 66 percent on the year, the government said on Wednesday, in a sign that record debt levels are putting a strain on many household budgets.
The Department of Constitutional Affairs said a total of 19,687 orders were made in England and Wales in the three months to September. Of these, 10,340 were suspended orders while the number of actions entered was up 55 percent.
An order for mortgage re-possession can be suspended by a court to allow time for arrears to be made good. An order for re-possession can only be made after the lender has entered a claim for such action to a court.
"The increase in mortgage possessions fits with the slowdown in house price inflation," said Alan Clarke, economist at BNP Paribas. "The conclusion is there are still signs of financial stress among home owners."
Britons have borrowed a record amount against their homes in recent years as house prices soared at double-digit rates and interest rates fell to the lowest levels in nearly 50 years.
But five interest rate rises between November 2003 and August 2004 helped bring the house price boom to an end and sharply raised the burden of repayment on household finances already stretched by rising energy costs.
The Bank of England has since cut borrowing costs once in August to 4.5 percent.
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