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Shocking rise in East Lancashire home repossession threats
6:06pm Tuesday 13th May 2008
By Chris Hopper »
HOME repossession orders have shot up by 37 per cent in East Lancashire, new figures reveal.
Some 415 families were threatened with having their homes repossessed in the first quarter of this year, compared to 302 in the same period in 2007.
That works out at 34 orders made each week.
The figures, which reflect how the global credit crunch and rising food and fuel prices have hit homeowners, show East Lancashire has seen some of the most dramatic repossession order rises in the country.
Council leaders and a property expert have blamed lenders for handing out mortgages at up to seven times people's income and some have called on the government to take action.
Burnley Council leader Gordon Birtwistle said: "The figures do not surprise me because of the financial situation that we find ourselves in.
"I am blaming the banks and the government for not stepping in early enough to prevent it.
"People have been led up the garden path and now it has all come crashing down.
"It is a worrying trend and I don't think it will improve. It will get worse before it gets better."
Pendle MP Gordon Prentice said the figures reflected problems in the US market but said the Government was taking steps to address the situation.
Ministers announced plans last week to help homeowners, including proposals for free advice for people at risk of having their houses repossessed.
Coun Colin Rigby, leader of Blackburn with Darwen Council, said he blamed ministers and lenders, not the borough's mortgage payers.
He added: "Who advises these people? If you go along, you assume you are talking to a professional but they have not received professional advice."
A Burnley property expert said the repossession statistics were "no surprise".
Denise Powton, general manager of Harris and Moss estate agents, in Manchester Road, added: "People borrowed an awful lot more than they should have done.
"The people to blame are the banks for lending in the first place. People were badly advised."
Michael Coogan, director general of the Council of Mortgage Lenders, said: "No one wants to see repossessions rise, but risk is a part of life and for some households circumstances change and they cannot get back on their feet.
"However, most people who suffer payment difficulties can get out of trouble by taking good advice, prioritising their debts, and communicating with their lender early."
The Government figures relate to mortgage repossession orders granted by courts and not all are expected to be carried out by lenders.
FACTS AND FIGURES.
- Burnley County Court issued 71 repossession orders in the first quarter of this year, an increase of 48 per cent compared to 48 in the same period last year.
- Blackburn's court issued 118 orders, up 22 per cent from 96.
- Accrington's granted 66 up 22 per cent from 52.
- Nelson's issued 67, up 49 per cent from 45.
- Rawtenstall's granted 93 up 52 per cent from 61.
- The place with the most mortgage repossession orders was Liverpool with 578 granted in 2008's first quarter.
- Haverfordwest, South Wales, registered the largest increase since last year with 248 per cent more orders granted.
- Almost 27,000 orders were issued by courts in England and Wales during January to March.
- Around 76,000 homes were repossessed during the housing crisis in 1991.
Your Say YourTelegraph
lisa, rossendale says...
7:59am Mon 19 May 08
Blamin the banks or the government is just another scapegoat. People need to take responsibility for themselves or do we want a nanny state being told what we can and cannot do by some-one ( i can see that going down well). Its quite simply people are more greedy now than ever, no-one is satisfied and want more material goods that the person next door.
Arrears involved looking at all income and expenenditure and seeingw hat can be cut out to help save some-ones home. Some of these people would said "We have to eat out once a week as it is not fair for the wife to cook 7 nights a week" budget of about £50 for that! "Have to go to the pub on a Friday night as that is the only social life i have" busget £50 a week. "Have to have sky as i have no social life and the normal channels are rubbish" Budget £35 + PCM and many more genuine comments like that were made, usually from one family!. And yes many of these people had a big flash car also. They would not accept that they need a house to be able to have satelite box attached to!
People have to be prepared to help themselves and whilst some will many many more wont give up what they see as essentials as it is not fair!
k, pendle says...
2:55pm Sun 18 May 08
Kevin, Colne says...
10:25am Fri 16 May 08
I'm with you all the way here.
Like you I drive an inferior car to my neighbours and contemporaries - an 8-year old, second hand Ford Escort with 133,000 miles on the clock.
It's just nicely run-in, and fully depreciated.
There's no point having a 4x4 on the drive and nothing in the fridge.
Credit is useful, sometimes vital, but incredibly dangerous.
This week we received a letter from our mortgage bank (we still have a very small mortgage on the property) inviting us to put the equity in our house to work. to help us afford the things we want.
Well, wants are one thing; but needs are something else. There's nothing we want that despeartely that we'd raise a second-mortgage for.
What I find astonishing is the way second-mortgages, which in my young days were considered a sign of financial distress, have been re-packaged as 'equity withdrawal'. This makes it sound very sophisticated, something you already possess and thus have a 'right' to. Yet it's still a loan secured on your house and if you can't repay it then you can wave good-bye to your home.
The only thing that supports the pyramid of credit is confidence.
Confidence is first a predictive and then a lagging indicator. Working out when it changes from one to the other is the hard part, and it's absolutely cruical.
As the Government is about to discover you can't make people confident by act of parliament.
v22, Pendle says...
6:00am Fri 16 May 08
The only disagreement I would raise relates to para 6. One does not need to be familiar with the works of Von Mises to forsee the outcome of the current situation. In my opinion, any reasonable and prudent individual should have been able to forsee the outcome some time ago.
Associates often query why I drive an inferior car to themselves; others question my adverse opinion of debt finance. I've never really bothered to explain or justify the reasons in any depth. I won't need to. The next few months will explain it all for me. For the credit junkies I've referred to... Les jeux sont faits.
Kevin, Colne says...
7:04pm Tue 13 May 08
Future generations will look back on this period with incredulity, wondering how so many people could fall into mass, collective delusion believing that credit equals wealth and one can build a successful economy on selling assets to each other at ever higher prices.
The writing has been on the wall for months, if not years that we'd end-up in mighty big trouble.
Remember, of course, that the true repossession figure is higher than stated owing to those who agree to 'sell-and-rent-back' to stave-off repossession. These are recorded as a sale but they are in truth repossesion in kind.
Politicians of all parties and none need not worry - there's plenty of blame to go around.
Those who are familiar with the work of Ludwig Von Mises and the Austrian School of Economics will have seen this catastrophe coming and long ago taken steps to protect themselves, others will be ruined.
I wrote to my local councillors, the then Leader of Pendle Borough Council with copies to others, including the Chief Executive about the financial crisis on 12 December 2007.
I ended my letter:
I would expect also that Treasurers of those authorities with a legal duty to re-house those who become homeless to have prepared and included contingency plans in next year's budget that take account of the anticipated rise in house re-possessions.
Not one of them had the decency to reply to my letter - heads in the sand.
Absolutely disgraceful and a terrible indictment uopn their leadership and stewardship.
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SLOWDOWN: The property market has been hit by the credit crunch, and the graph (right) shows the extent of the problem
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Kevin, Colne says...
9:03pm Mon 19 May 08
The first port of call has been to emphasize to them that comsumerism is a dead-end street.
Secondly, to try and educate them to grasp the difference between 'needs' and 'wants'; and not to conflate the two.
Third, to treat credit with the utmost care.
Perhaps my generation are the way we are because our parents had lived through The Great Depression and saw what real grinding poverty and hardship was. The stories that I heard from my grandparents who lived on Tyneside about 'The Slump' still makes my blood run cold.
It was Nicolai Kondtatieff, the exponent of the long-wave theory, who once said that wisdom skips a generation. Looking at the world today I think we know now which generation that is.