Repossession fears soar
Hundreds of families fear they are in imminent danger of losing their home in the run- up to Christmas and in the New Year, The Belfast Telegraph has learned.
Despite the 3% cut in interest rates over the past two months and demands from the government for banks to be more lenient with defaulters, the number of homeowners seeking professional advice on avoiding repossession shot up by more than 400% in recent weeks, figures disclosed to The Belfast Telegraph show.
More than one thousand households stand to lose their home over the next few weeks, while many others will begin paying back substantial arrears on top of their monthly mortgage payments.
The government-funded debt charity Money Advice dealt with 123 mortgage and secured loan problems across Northern Ireland in the last quarter, amounting to almost £1m in arrears. This is a 434% increase on the same period in 2007, when the charity handled 23 cases to do with mortgages and secured loans amounting to under £100,000 in arrears.
Actions for repossession processed by the Northern Ireland Court Service have nearly doubled over the same period. The last quarter saw 1,006 homeowners issued with writs and summons through the Court Service compared with just 521 in the same quarter |of last year.
According to a forecast from the Council of Mortgage Lenders, repossession rates across the UK will increase by 67% on average next year and 4.4% of all mortgages will be in arrears by the end of 2009. Repossession rates in Northern Ireland are accelerating almost 30% faster — at around 93%, by the Court Service’s November estimate.
The figures follow urgent requests from Stormont for high street lenders to pass on interest rate cuts to mortgage |holders.
Earlier this month, First Minister Peter Robinson and Deputy First Minister Martin McGuinness convened an emergency meeting with Ireland’s four major banks to discuss ways to ease conditions for struggling borrowers. Martin McGuinness said the banks “should be doing everything in their power” to help borrowers through the squeeze.
Scott Kennerly, development officer at Money Advice, said top-down initiatives had so far failed to feed through to the hardest hit home loan holders.
He said the emotional turmoil of mortgage problems was putting strain on some of Northern Ireland’s worst-off families over the Christmas period.
Mr Kennerly said: “We are seeing people handing their keys back to lenders, going bankrupt because they can’t afford their repayments, and sometimes threatening to end their own lives.
“Our advisers are working overtime and some are coming in at 7am to fit people in before work. With everybody we see, there’s the real emotional turmoil that comes with being in debt — it seeps into every area of your life.”
Kieran Thomas (42) from Londonderry, fell behind with his mortgage installments for the first time in July when his partner left him and he quit his job to look after their three children. Since then he has scraped together money from friends and family, but faces an uncertain future without a regular income and the means to keep up with his repayments.
Mr Thomas said: “I’m desperate — I can’t think any further than today. This is the week before Christmas.
“The kids will probably get something small from my family, but it will only be the bare essentials. The mortgage company doesn’t seem to be trying to help me. I’ve never been in difficulty before.”
DUP assembly member Jim Wells, deputy chairman of the department of regional development committee, described the new repossession data as “startling” but said they should be considered in the wider context of Northern Ireland’s housing market which has 400,000 owner occupiers.
Mr Wells told The Belfast Telegraph: “We must not make the situation worse and sap confidence in the housing market with ill-considered remarks. Having said that, this is a worrying trend and if it were to escalate any further it would be a cause for extreme concern. I hope it does not.”