29/10/2008 by Dave.

The FSA has revealed that repossessions, where the house has been successful sold by the lender, have rocketed by 71 per cent in Q2 2008, to 11,054 cases.

According to its latest Mortgage Lending and Administration Return report into mortgage lending in the UK over the second quarter of 2008, there are 312,000 in arrears in the UK, a rise of 16 per cent on 2007 figures.
On average 2.58 per cent of mortgage books are not fully performing, almost double the Council of Mortgage Lenders’ industry average of arrears.

The FSA says that 312,000 mortgages are in arrears of more than 1.5 per cent. It says this figure can be reasonably transposed to equate to three months of arrears.

The report found that the stock of possessions in the UK has also soared to 21,407 cases.

The total value of outstanding loans is £1,178bn, an increase of 7.5 per cent compared to Q2 2007. But quarterly growth continues to slow, with a Q2 increase of just 1 per cent.

The FSA says new lending peaked in Q3 2007 last year at £102bn before declining to £72bn in Q2, leaving gross lending 26% lower than a year earlier.

It also found that significantly fewer new loans have an LTV of more than 90 per cent, reducing from a peak of 15 per cent of new lending in early 2007 to 10 per cent in 2008 Q1 and Q2. The use of combinations of high LTVs and high income multiples has also declined to 7 per cent of new lending in each of Q1 and Q2.

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22/10/2008 by Dave.

Various mental health organisations have expressed concern that the credit crunch is adversely affecting the psychological wellbeing of many Britons, and could even trigger a “mental health disaster”. 

Health insurer Bupa has uncovered that a third of British worker are severely worried about the security of their jobs, and two out of five have said that levels of stress at work have risen since the onset of the financial crisis.

Mental health charity MIND has also stated that the volume of calls to its helpline has doubled year-on-year to October. The charity has put the increase down to the financial fallout.

Additionally, a study conducted by the Legal Services Research Centre revealed that roughly 130,000 people have visited their GP about debt-related stress recently, costing the NHS between £15 and £20 million.

Mental health ailments like stress, anxiety, depression and insomnia have largely been blamed on the rising cost of living, soaring debts and the threat of redundancy, repossession and recession.

In a 400 page report on Mental Capital and Wellbeing, the Government’s Foresight programme identified a strong link between mental health problems and debt.

The report found that debt-ridden individuals have two to three times the rate of depression, three times the rate of psychosis, double the rate of alcohol dependence, and four times the rate of drug dependence compared to the general population.

As recession becomes a reality and the economic downturn hits home for many in the UK, mental health worries are only expected to worsen.

A spokesman for the Department of Health has urged those in debt to seek professional advice about their financial troubles. “The key thing is that people who are experiencing stress and worry about financial issues know where to go to get help and find solutions.”

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12/10/2008 by Dave.

When times get tough, people get tougher. The City grows savage, companies turn cut throat and dogs start eating dogs. Well perhaps the economic crisis hasn’t quite filtered down to the canine world yet, but seeing as a poll found one in ten children were stressed about money, it could just be a matter of time.

 Amongst all the vicious thrashing about to stay alive in the market, a multitude of unscrupulous endeavours have sprung up and regulators are now hungry to clamp down on them. Fingers are pointing, fines are flying about and allegations of fraud are being issued whilst sideliners bleat about the need for transparency.

One sector to have come under attack would be the sale and rent back industry. “Vultures!” They’ve been branded by charity Shelter. Painted as predators trapping vulnerable, debt ridden homeowners with promises and short term relief, horror stories concerning the deals have begun to appear in the press. But are we really seeing the whole story? Or are a suspect few shaming an otherwise honest service?

Sale and rent back schemes work by offering to buy hard-up people’s homes and then renting them back to them. It’s seen as a quick form of debt relief and a way out of expensive home repayments, as the rent is often much cheaper. The upside is that families can remain in their homes, deals can be arranged rapidly and it can stop repossession.

However, horror stories have involved these companies buying homes for as little as 20% of the market value and forcing people out after a matter of months.

Estimates say that 2,000 firms offering sale and rent back deals have emerged in the last three years and up to 20,000 people have sold their homes to them. Surprisingly, this sector has been going uncontrolled and after a spate of negative press, the Office of Fair Trading (OFT) has called for it to be regulated by the Financial Services Authority (FSA).

Identifying that there is “potential for severe detriment to homeowners”, the OFT has recommended that compulsory regulation is implemented, along with increasing consumer awareness and improving information about housing benefits to weed out the crooked operators from the legitimate ones.

Those within the sale and rent back industry are dismayed to find their reputation tarnished by rogue “vultures”. Chairman of the National Landlords Association (NLA), David Salusbury, has affirmed that the majority of landlords involved in sale and rent back schemes go about their business with “professionalism and integrity” and bemoaned the fact that “a small number of ‘rogue’ operators have now brought the entire market under scrutiny.”

The director of DB Housing, a company that offers the sale and rent back option, Daniel Lowerson has assured people that recent press about sale and rent back schemes “focuses on the negative aspects of a tiny minority in the marketplace. We don’t necessarily classify ourselves as a sale and rent back company, we have the option of shared ownership but we also offer full rescue projects and home recovery schemes. In my opinion, I welcome news that the FSA will regulate the industry. As soon as it’s regulated the better, as then good companies who do business correctly can thrive.”   

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