The bald figures, if you would like to see them, are:

The figure for Corby is nine times higher than that for West Dorset.

The Council of Mortgage Lenders reported a rise of 15% in repossessed UK homes in the first quarter of 2011; Shelter’s figures corroborate that rise, and add to the picture by reporting a 3.3% average unemployment level in the hardest hit local authority areas. This figure compares with an unemployment average of just 1.4% in the areas with a lower repossession rate.

The majority of the repossession hotspots are in:

• North of England
• Around the Wash
• East London and out to North Kent and Essex coasts

The headline unemployment rate for England actually dropped slightly for the first quarter of 2011 to 7.7%. Nonetheless, it is expected to rise sharply later this year, with the public sector job cuts beginning to influence the figures, and a further rise in repossessions expected.

It’s interesting to note that, despite the link between unemployment and repossession noted above, unemployment in Corby has only risen by 0.9% in three years to September 2010. Mortgage lenders faced lots of criticism: it was widely believed that they had enabled borrowers to take on debt when they were really not disciplined or experienced enough to cope with the responsibility. Yet Shelter’s figures would suggest that the major cause for the high repossession rate is reduced earnings and unemployment. And Shelter’s figures are held up by those from the Consumer Credit Counselling Service; the struggling homeowners asking for their advice last year fell into the following categories:

• Unemployment:        19%
  
• Reduced Income:    28%
  
• Over-committed:    08%
  

Frightening Research

Commenting on the research figures, Shelter’s chief executive, Campbell Robb, said:

“This research paints a frightening picture of repossession hotspots across the country where homeowners are on the brink of losing the roof over their head. We know only too well that the combined pressures of high inflation, increased living costs and stagnant wages are really taking a toll on people. All it takes is one thing like job loss to tip people over the edge and into the spiral of debt, repossession and ultimately homelessness.”

Two Sides to Every Coin

We recognise, of course, that these figures represent thousands of personal catastrophes; however, they also represent opportunities.

Young couples who are desperate to start climbing the property ladder, as well as property developers, can get a more affordable property by concentrating on the repossessed houses for sale sector of the housing market.

So, if you are actively looking to buy a repossessed property, repossession hotspots can be found in:

• Fenland, next to the Wash (5.04 at-risk homeowners per 1,000)
• Harlow in Essex (4.85 per 1,000)
• Manchester (4.63 per 1,000)
• Peterborough (4.57 per 1,000)

If you are typical of millions of others then lurking quietly in the back of your mind is the fear that just one bad throw of life’s dice could see the house you’ve worked so diligently to turn into a home could be taken away from you by the banks.  This story is for you; sit back and enjoy.

Turning the Tables on the Banks: The Facts

It’s 2009 and retired policeman Warren Nyerges and his wife Maureen bought a £100,000 house on a Florida development.  They paid in cash, no mortgage required.

One year later, in February 2010, the Bank of America initiated repossession proceedings against the couple; this despite the fact that the couple had paid for the property up front and had no debt relating to it.

It was obvious that if the couple Warren and Maureen fought the action they would win; which is exactly what happened.  How could it be otherwise when there was no outstanding debt on the property?

But taking legal action is just as expensive in America as it is most other places and, despite winning their case, the Nyerges were left owing £1,500 in legal fees.

As you would expect, the couple requested the bank make recompense for this amount; after all, it was the bank’s mistake that precipitated the debt.  However, even in the face of repeated requests, the bank failed to pay out.

Turning the Tables on the Banks: The Fallout

Quite understandably, the couple was more than a little annoyed by the bank’s seemingly cavalier attitude to their plight.  They took the bank to court in an attempt to get their recompense – and they won.  The court ordered the bank to pay up.

Five months and many phone calls and letters later and still the Nyeges were £1,500 down.  So they, quite reasonably in the circumstances, took out a foreclosure order against the bank.

When interviewed by CBS News, the couple’s solicitor, Todd Allen, commented,

“They’ve ignored our calls, ignored our letters, legally this is the next step to get my clients compensated.”

And so it was that, accompanied by two policemen and a moving van, Mr Allen called at the bank to collect desks, chairs, computers – and cash from the tellers’ drawers – to reimburse the Warren and Maureen for their out-of-pocket expenses.

The local media reported that within the hour the bank manager produced a check for around £3,515.11 to cover the couple’s estimated expenses thus far.  In a statement to the local newspaper, the bank apologized, saying,

“We apologise to Mr Nyerges that there was a delay in receiving the funds. The original request went to an outside attorney who is no longer in business.”

Turning the Tables on the Banks: The Relevance to the UK

A story to bring a smile to the face of most people’s faces in these post-bank-originated recession days; but, you may be thinking, how relevant is this story to us here in the UK?

Based on figures for the first three months of 2011, by the end of the year as many as 40,000 people will have experienced, or be in the process experiencing, repossession. In May of this year, Sky News reported that 9,100 UK residents had lost their homes to the banks.

of repossession In the first three months of 2011 some 9,100 Britons lost their homes as banks repossessed them — a position as many as 40,000 people could find themselves in by the end of the year. Some calculations have 90% of homeowners at risk of repossession if interest rates rise; this chilling prediction is based on the tide of variable interest rate mortgages that has overtaken the property market.  It might seem a good idea now, when interest rates are at an historic low, to take out a variable mortgage – after all the initial repayments are going to be very affordable, but what happens when, as must inevitably happen, interest rates begin to rise again?

Turning the Tables on the Banks: The Significance to Every Homeowner

So, the Nyerges’ story was funny and heartwarming – it would make a marvelous premise for a movie – but what is its point?

The point is: repossession and the risk of repossession haven’t gone away; in fact it remains a real concern to UK homeowners.

The message is: if you have any concerns whatsoever, no matter how remote the risk might appear, we are strongly advising you to take action now.  There are people out there who will talk to you free of charge; you can contact them via the links given below.

After all, while the Nyerges’ story is good and heartwarming, if you listen very hard you can hear the nation mutter under its collective breath, “Only in America.”

Turning the Tables on the Banks: Organisations that can Help

Citizens Advice

Phone 084444 111 444

Shelter

Phone: 0808 800 4444

The National Debtline

Phone: 0800 808 4000

As a nation we continued to spend during the height of the credit crunch and in so doing fuelled a 1.2% recovery in the British economy last quarter – the best growth for 10 years or so. Now, however, it seems we have finally got the message – there are going to be cuts and job losses. So we are beginning to tighten our belts – moving us towards that dreaded double dip; among the economists and money men this phenomenon is known as the dead cat bounce, which would be funny if it wasn’t so very descriptive.

Now, I’m not sure if my next question is politically incorrect or not, but I’m going to ask it anyway: isn’t this sort of thing just talking us into that double dip? Isn’t it possible (probable) that all the negative chatter pushes Mr and Mrs Average to tighten their belts and stop spending? The new government have emphasised the need for cuts, and of course we do have to pay for our previous profligacy, but aren’t they just labouring the point to highlight the differences between their approach and the economic laxity of the outgoing government?

It’s all very well us being primed for what is to come but I worry that by painting such a negative picture we are simply building up the impetus for the cat to bounce even higher than it would have done anyway.

As a writer, rather than an economist, it would be interesting to hear your take on this issue – and I stand to be corrected if need be!

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Well, there’s not much fun in the world of debt but this interactive debt map from the Centre for Responsible Credit comes close.

In all seriousness, this interactive tool reveals levels of debt throughout the country on a county-by-county and, in some cases, a town-by-town basis. In terms of house repossession, Corby in Northamptonshire, Barking and Dagenham, Newham, Knowsley, Thurrock, Burnley and Luton had the highest proportion of repossession claims per 1,000 of the population in 2009. The tool will also show you figures for personal insolvencies, unemployment rates, bankruptcies, IVA levels, and landlord repossessions (just click on the Data tab followed by CfRC Indicators to see what’s available).

The Centre for Responsible Credit, according to its website, is “an independent, not for profit, research and policy unit.” They publish analysis of policy and regulatory trends and information about the “impacts of debt and financial problems.”

In summary, the largest percentage fall was in the West Midlands, where repossessions fell by 40% compared to the same period in 2008.  Meanwhile, the greatest number of repossessions per households occurred in Wales, where 1.4 properties out of every 1,000 were repossessed in the quarter, although this figure does represent a 34% fall when compared last year.

The figures below represent:

1. Total number of repossessions for the period
2. Percentage rise or fall on Q3 2008
3. Number of repossessions per 1,000 households

• Total England & Wales: 24,938; down 34%; 1.1
• England only: 23,205; down 34%; 1.1

Regional Break Down

• North East: 1,465; down 34% ; 1.3
• North West: 3,875; down 37%; 1.3
• Yorkshire and the Humber: 2,830; down 29%; 1.3
• East Midlands: 2,155; down 33%; 1.2
• West Midlands: 2,480; down 40%; 1.1
• East: 2,360; down 31%; 1.0
• London: 3,425; down 36%; 1.1
• South East: 2,925; down 34%; 0.8
• South West: 1,700; down 32%; 0.8
• Wales: 1,710; down 34%; 1.4

For even greater regional breakdown of repossession figures for the quarter, click on the relevant region above.

Has the ‘chat’ been spun in an attempt to gloss over his recent comments?  You decide…