House repossessions stem from job losses
THE collapse in property prices and thousands of job losses have led to a vast increase in the number of houses being repossessed.
Experts have also warned that increasing numbers of people will lose their homes.
Court Service figures released today show that repossessions rose by 93 percent over the last year, with 2,689 writs issued for possession of houses from January and September this year.
And, as falling house prices combine with a looming recession to create a situation unheard of in Northern Ireland's recent history, a housing expert last night warned that repossessions will become more and more common across the Province.
Revealing the dramatic rise in repossessions, Court Service director David Lavery said that from January there would be free legal advice, provided by the Housing Rights Service, for the growing number of homeowners threatened with repossession.
Social Development Minister Margaret Ritchie said that the sharp increase in repossessions was "worrying" and a spokeswoman for the Lord Chief Justice stressed that judges viewed repossession proceedings as a "last resort".
Ursula Toner from the Housing Rights Service said that it was aware of some sub prime mortgage lenders who were moving in to repossess houses much more quickly than banks and other well-known high street mortgage lenders.
"Unfortunately we do expect more repossessions over the coming months," she said.
A City of London financial advisor also said that rising repossessions would drive house prices lower as banks conducted fire sales of houses to recoup some of their cash, accepting offers below the current market rate.
Jonathan Davis, managing director of financial planners Armstrong Davis, said that repossessions would go "through the roof" as the "one in a hundred-year economic crisis" escalated.
"Of course repossessions will rise, particularly among investment properties, because if people don't have the income, how can they pay the rents requested?" he said.
"Falling interest rates are not really feeding through to investment mortgages which is going to make things much worse.
"The criteria for mortgages are getting more and more strict and because the buy to let sector is the most at risk of a bad bunch, the buy to let lenders have created a massive chasm between the interest rates on prime loans and buy to let loans."
Mr Davis, who is also a spokesman for the housepricecrash.co.uk website, said that he expected repossessions to "go through the roof" over the next year.
"The three sectors of the economy which had the biggest growth in recent years were Government, financial and construction," he said.
"Now all of them are at best not taking people on, and at worst, in construction and financial, getting rid of people by the tens of thousand.
"Repossessions will go through the roof, unemployment will go through the roof and the properties will go through the auctions.
"The auctioneer will tell the sellers 'No, we're not going to put it up for sale at that price — if you want to put it up it will have to be at a far, far lower price'.
"If the auctions are the only areas where properties are actually being transacted, then that becomes the actual market price for houses and we will see a big reductions in asking prices."
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Monday 28 May 2012
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