We can get you a Realistic Offer on your home with a Quick House Sale
Here’s a sobering fact for you:
However, an even more sobering fact is that this figure, dramatic as it is, does not paint the true picture.
Currently record low interest rates of 0.5% are keeping mortgage payments down; even so, many homeowners are having to ‘cook the books’ in order to keep up with their repayments. Some people are only managing to keep the roof over their heads by using redundancy payments or even credit cards to make their monthly mortgage repayments – what will happen to these folk if interest rates rise or their partner is made redundant?
Property repossession statistics are compiled by the Council of Mortgage Lenders (CML), but there are some home losses that are not recorded:
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Sale and Rent Back Schemes
These are the schemes that effectively allow the homeowner to avoid repossession by becoming a tenant. Their house is purchased by an investor, who then rents it back to the previous mortgagee. These properties don’t appear in the figures, yet they have been ‘possessed’ by somebody other than the original owner.
The Office of Fair Trading (OFT) estimate that over the past few years around 50,000 homes have been sold for rent back and they also estimate that over 25,000 of these were in 2008 alone.
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Second and Third Charge Holders
When a borrower defaults on a mortgage, there is a hierarchy of people who must be paid back from the proceeds; the CML collects statistics relating to first charge holders only (i.e. those who must be paid back first). They do not collect data relating to second charges. If a homeowner has taken out a secured loan using his property as the security, the loan company would have second charge on the property – or even third if more than one secured loan has been taken out. So, if somebody has paid off their mortgage but then defaults on a secured loan and has their home repossessed as a result of defaulting on loan payments, that repossession will not appear in the statistics.
Published figures are, of necessity, historical as it takes around a year after first missed mortgage payments for repossession to happen.
If you are struggling with meeting your mortgage repayments and want to avoid repossession you could consider a fast house sale.
There are some reputable professional cash house buyers around who can complete a purchase on your property within a month or so. To achieve this they will sell your home at below market value – usually they get around 70% of the current value of your home. It’s not ideal, but it is a solution to a very worrying problem. You could also consider a sale and rent back scheme, as outlined above.