House Repossession Rates Sky-Rocket

Article published on 26th May 2008

The Ministry of Justice released figures this month that show a considerable increase in the number of home owner facing legal actions heading to the repossession of their homes. There have been 37,740 in the last 3 months, which is a 17% increase on the numbers of cases in the previous quarter and a 20% increase in figures a year previously.

The highest rises were seen in England, making it the worst hit region in the UK. The figures give a clear indication that money and mortgage lenders resort to court proceedings much more quickly than in previous years. The housing charity Shelter has further highlighted the gravity of the situation in a recent press-release, stating that even during the last housing crisis in 1991 (thanks to a general economic downturn), there were on average 2.5 counts of initiated court proceedings for ever executed repossession. In 2007 the average figure was a round 5.

These figures make grim reading indeed, and although job losses have not risen to the levels seen during the 1990's downturn, they are on the increase. Indeed the numbers of managers being made redundant has risen by 3% since 2007, according to a report by The Chartered Management Institute.

Although Britons have shown that, historically speaking, we are less prone to investment for in savings accounts, savings levels have still dropped to an even more distinct low than usual. According to a report released by the reference agency, Call Credit, there are millions of household in the UK who are spending what little savings they have in order to meet increasing mortgage payments and other necessities like the costs of food and fuel.

Those households that have no savings at all are sinking even further into debt and debt agencies have reported a marked growth in the number of citizens turning to them for advice, even from amongst professionals with well-paid careers. The charity Community Money Advice, which operates throughout the British Isles, has revealed that it too has experienced an 85% increase in clients.

Although savings and insurance may seem like a low priority when faced with looming bills, it is becoming increasingly important for Britons to acknowledge digest the importance of making provision for unseen turns in the state-economy or their own personal fortunes. It is too simplistic to claim that the financial security issues facing so many millions of British citizens has resulted purely from economic forces beyond our control. This may be true in a significant minority of cases, but certainly not the majority.

We have to start borrowing less and start saving more (and start saving sooner), and even consider taking out appropriate insurance policies, if we are to avoid the detrimental effects of economic downturns.

Indeed the British phobia against savings and insurance are large parts of the reason these periodic downturns come about. Although borrowing more and spending more give an boost to the economy in the short term and make government figures about consumer spending, and therefore the financial ‘confidence’ of the British public, seem rosy, they inevitably contribute to an economic slump (and potentially even a crash) in the longer term when card debts and other loan are called in, which in turn makes banks and loan companies lose confidence and become more hard in their dealings in order to recoup potential losses.

Previous Article: Looming Redundancy Crisis for House Building Firms

Next Article: Britons Losing Out Over Mortgage Protection Insurance

List of Articles: Click Here to Return to Insurance Articles

Search Archive of Articles

Enter your search term here:

Or choose a category or archive date to view by: