Property Rescue Blog

Today the Bank of England releases the first tranch of cash into the economy under its new policy called quantitative easing, whereby it is buying up government assets and debts so that it can inject more money into the economy. 

The Bank plans to raise an additional £75 billion of new money this way over the next few months.  Although today is only the start of that massive cashflow relief, it has been hailed as a kick start to the British economy in a time of recession.  We have been promised several ‘kick starts’ before but in all honesty most of them seem more like a gentle nudge than a kick; the VAT rate reduction springs to mind as one example. 

The theory behind quantitative easing is that as cash starts to flow back into the economy it will stimulate business and spending, thereby helping the country climb out of recession.  The raft of interest rate cuts by the Bank of England have done little to stimulate growth or improve confidence within business, as reflected by the Federation of Small Businesses (FSB), who recently said that most of its members didn’t want to see Bank rates cut to the half of one per cent announced last week, and most felt improved access to capital would be of greater benefit.

It is only through increased help to businesses that all of us will see light at the end of the tunnel.  Whilst businesses lack confidence they fail to grow; failure to grow means stagnation, which in turn means loss of market share and poorer profits.  All that adds up to one thing for the man and woman in the street – redundancy and unemployment.  Therefore businesses are a key focus of the government, and rightly so.

We must all hope that the latest fiscal policy turns out to be a success but it is likely that it will take until at least the end of this year before the recessionary tide starts to turn.  For some, that will be too late.  If you are facing redundancy, a long period of unemployment, or have had to take a pay cut in order to keep your job, you will be concerned about more imminent problems such as how to pay your mortgage.

Meeting household expenditure at a time like this can be very difficult.  Many people have had to economise but the few that are already at breaking point are finding their difficulties cannot be overcome by measures as simple as buying less expensive groceries or cutting down on the entertainment budget.  For these people more drastic action is required.  

If you are facing the possibility of losing your home because you cannot pay the mortgage contact Property Rescue to find out about their guaranteed offer to buy your home and their ‘buy and rent back’ option, which allows you to sell your home to Property Rescue but stay in it as a tenant.  Both these schemes will prevent repossession and all that entails.  Phone for more details and an informal, friendly chat with one of the experts on Property Rescue’s team.

Bankruptcies in England and Wales are rising steeply.  The most recent figures from the Insolvency Service show an increase in personal bankruptcies of more than 9% during the third quarter of 2008 over the same quarter in the previous year.  When business failures are included the figures are worse, showing an increase of 26% from the same quarter in 2007.

This upward trend in business collapse and personal debt shows no sign of abating.  As recently as September last year it was estimated that UK debt was growing at a rate of ?1 million every 7.3 minutes!  That’s an amazing ?200 million debt accrued in just one day – an unsustainable level by anyone’s standards.

Perhaps if global banks had been a little more circumspect about the loans they made, particular within the sub-prime sector, and tighter regulation had been employed over how that debt was managed within the banking industry, the problems that we see today would have been alleviated.  There has been criticism levelled at individual borrowers who knew they were taking on debt beyond their means but it is easy to be critical with 20-20 hindsight and to forget the role that banks and lenders played in encouraging us all to believe that high levels of debt were nothing other than ‘normal’.

In the quarter ended September 2008 there were over 27,000 personal insolvencies, made up of bankruptcies and Individual Voluntary Arrangements or IVAs.  Whilst IVAs are a popular option for people who can afford to pay back some of their debt, the banks appear less willing nowadays to come to agreements that allow this to happen, pushing more and more people towards the only option – bankruptcy.

The effects of personal bankruptcy should not be under-estimated.  It is most certainly not a soft option that allows people to become debt free.  Secured assets – including the home – will be sold and the individual’s credit ratings will be severely affected for many years to come.

Being backed into a corner by rising debt is serious.  For those who have equity in their homes, selling property to pay off the debt may be an option.  This step should be considered alongside impartial advice from debt agencies, but for some people selling their only asset – i.e. their home – is the only alternative to declaring themselves bankrupt.

Selling property in a recession is difficult.  Property Rescue guarantees to buy your home and will complete the transaction in a matter of days, which should be fast enough for even the most insistent lender.  If your home is under threat of repossession or debt looks as if it will end in bankruptcy, study your options before you make any decisions.  Contact Property Rescue for a free valuation of your home and information about their guaranteed sale service.

As we approach Christmas and the New Year it’s a good time to reflect on what has happened in our economy during the past 12 months and where we are likely to go as the recession bites in 2009. 

2008 has been a traumatic year for the world’s financial markets.  One could be forgiven for being rather gloomy about the current situation and no one would argue that there is plenty to be gloomy about!  However, there are one or two chinks of sunshine and perhaps we should – especially at this time of year – try to look at the more positive aspects of recent events.  After all, the banks could have gone bankrupt and they didn’t, housing prices could have crashed beyond all expectations and they haven’t, and now, as we head towards 2009, there is just a glimmer of hope that property is starting to pick up again, albeit very slowly.

Another fact is low interest rates – bad news for savers but good news for mortgage holders because whilst lenders haven’t passed on the full interest rate decrease, the majority of loans cost substantially less to service than they did this time last year.  Oil prices are about a third of their peak and this is reflected in fuel prices on the forecourt.  Food prices have stabilised but with competition strong, the supermarkets have some exceptionally good promotions that are likely to benefit most shoppers.

Nevertheless, thousands of people have already lost their jobs and more will do so over the coming months.  Some pundits say that the total jobless will reach 2.5 million by April next year.  Let’s hope they’re wrong but if those predictions are anywhere near correct there are many who will be struggling with their mortgage repayments, even should bank rates fall further.  

Christmas is a time when we expect to be in our homes with our family and loved ones, feeling secure about the future.  Unfortunately, there are many who will not be able to do that this year, and will be very fearful about their job security as they start back at work in 2009.  Remaining in your home is a top priority for many, no matter what their financial circumstances, but as income reduces it’s an objective that can sometimes seem impossible.

Property Rescue has a scheme whereby people can stay in their own homes even if they can no longer afford their mortgage repayments.  This is called a ‘sell and rent back’ scheme, where you, as a property owner, sell your home to Property Rescue but can stay in it as a tenant.  Rent is agreed in advance and you have the normal protection under the law that any tenant has.  Although you will no longer own your home, you don’t have the disruption of moving house nor the trauma of repossession.

Property Rescue has helped hundreds of families over 2008.  If you are in a situation where you face the possibility of repossession or your debts are threatening to overwhelm you, call Property Rescue for an informal chat.  Their consultants will talk to you without obligation and give you a free valuation for your home.

For the first time this decade the number of people without jobs has risen to more than one million.

In an economic downturn this announcement was very much on the cards but of greater concern over the long term is the fall in job vacancies coming on to the market.  The Office for National Statistics (ONC) reports that employment amongst people of working age fell by 0.4% in the quarter ended October 2008, a similar fall to that seen in the previous quarter.  This percentage may not seem large, but what is worth noting is that the number of available jobs fell by 134,000 over the same quarter – the biggest fall for 16 years.

Over one million people are now claiming unemployment benefit, an increase of some 75,000 over the previous month's figures and up more than a quarter of a million during 2008 as a whole.  Redundancies are also on the increase with 41,000 more people losing their jobs than in the quarter ended July 2008.

At present, the ONS reports that average earnings for those in employment is unchanged.  With bargains on the high street, petrol prices coming down and the promise of massive January sales, those who are still in work can make significant savings by shopping carefully.  However, there is a huge feeling of nervousness amongst the employed, not helped by analysts' predictions that three million will be unemployed by 2010.

To present a balanced view, not every commentator shares this pessimistic approach and it is only as the recession plays out its next act that we will see more clearly how the global and UK downturn is likely to affect us all.  In the meantime, the people who cannot find jobs are the ones who are suffering, especially in the lead up to Christmas.  Some of those worst affected will be facing a very real possibility of losing their homes as a result of failing to keep up their mortgage repayments.  For these, Property Rescue offers a solution by buying their home and allowing them to stay there as tenants.  This can mean that people in seemingly impossible situations can rebuild their lives without the stress of moving or, worse, becoming homeless.

Property Rescue deals with every client individually and makes sure all aspects of the transaction are explained in full before a decision is made.  There is no obligation to proceed if, after initial discussions, you feel their offer isn't right for you.  No salesmen will call and you won't be pestered by phone.

Call Property Rescue today to find out more about their buy and rent back scheme.  Remember, the advice of their consultants is without charge and in complete confidence.

This is a short guide to the process that your lender will have to follow if your house is to be repossessed.  Remember, your lender has an obligation to act fairly as well as to comply with the law.  If you don’t think they’ve done so, consult your Citizens Advice Bureau or a Solicitor, who will help you take the matter further. 

• Arrears
  Lenders can start proceedings against you if you default on two mortgage  repayments but in reality many are reluctant to do this and will work with you  wherever possible to find a solution.  Your lender will write to you chasing  payments, so you should speak to them as soon as you start experiencing  financial difficulties.
• Solicitor’s Action
   If your mortgage repayments remain outstanding for 4 to 6 months the  lender is likely to put the matter into the hands of their solicitors.  You will  receive a letter asking for payment in full of the outstanding amount.  If you  haven’t already made contact with your lender, make contact with their  solicitors – both parties want to see you remain in your home and repay your  debt, even if payments are temporarily lower or the length of the mortgage  has to be extended.  Don’t ignore any communication from your lender’s  solicitor.
• Court Action
  If you cannot pay or cannot reach an agreement to reduce your payments in  line with what you can afford, or if you fail to communicate with your lender or  their solicitor, the lender will start action against you in the County Court. You  will be informed of the date of the hearing, which you should attend after  seeking advice from the CAB or your own solicitor. 
• Court Decisions
  This article does not allow us to go into depth about the variety of options  open to the Court, but they may dismiss the case if payment has been made  in full, or, in certain instances, an adjournment may be sought.  If your home  is to be repossessed an Order for Possession will be made.  Sometimes this  Order is deferred to allow you more time to repay your debt.
• Moving Out
  If the Court has granted an Order for Possession it will have stated a date by  which you should have moved out of the property.  If you are still there after  that date you may be evicted.
• But don’t despair!
  Even once the repossession chain of events has begun you can still avoid it by talking to Property Rescue.  They have helped people in your situation, even up to the very last minute, and guarantee to make an offer for your home.  You can sell to Property Rescue but remain as a tenant or you can decide to move out and clear your debts from the proceeds of your sale.

Don’t bury your head in the sand if repossession is threatened.  It won’t go away and avoiding communication with your lender or their solicitor is likely to make matters worse.  Property Rescue’s advisers are sympathetic to your situation.  They will provide you with all the details you need in complete confidence and entirely without obligation.

The rate of inflation has risen to 4.7%; new unemployment figures released this week show 5.5% of the working population were without a job during the three months ending July 2008; those claiming Job Seekers’ Allowance have increased, the number of redundancies is on the rise, and the world financial markets continue to be jittery. 

As economic gloom deepens, it feels as if we are all at the mercy of the government, world monetary forces and powers far beyond our control.  There is little we can do to control inflation it’s true, but there are a few simple measures that can help stretch the household budget, especially as summer turns to autumn and we switch on the heating:

• The government has announced help – via the energy companies – for  homeowners to insulate their homes.  Your energy supplier will know more  and should be contacting you with details of how you might benefit.
• If you haven’t already shopped around for gas and electricity, now’s the time  to do so.  A surprisingly large amount of money can be saved by switching  provider.  Cost comparison sites are available, such as uSwitch.com. 
• Think about where you shop and what you buy, but remember to take  account of all the factors involved.  If you buy mainly in a cheap supermarket,  but ‘top up’ with luxuries from two others, you’re likely to spend more in petrol  than you save at the till. Use the facilities you already have – like your freezer  – and plan ahead when you’re grocery shopping so that the number of trips  you make is reduced.  Planning and making a list will help you buy only what  you need and avoid throwing out food past its sell by date.
• Don’t dismiss second hand stuff!  If you have growing kids or are expecting a  baby, look out for second hand shops, charity shops and car boot sales,  where new or nearly new clothes and toys can be picked up for just a few  pounds.
• Watch the interest on your credit cards.  If you have a big credit card bill, look  at transferring the balance to a company who offers a balance transfer  deal.  A little surfing on the net could save you a lot of money!
• Use comparison sites to check that you’re getting best possible deals on  insurance for your car, home and contents.  It’s tempting to ignore home  contents insurance when you’re strapped for cash, but if you change your  existing arrangements, you could save a significant sum without having to  relinquish it.

At Property Rescue we hope these tips come in handy.  They’re all simple things that are easy to do but very worthwhile.  Remember, if budgeting becomes impossible and you can no longer afford your mortgage repayments, always talk to your lender.  They will be keen to help you if at all possible.  If you need to sell to avoid repossession or simply to cancel out debt, then contact Property Rescue.  Even in such a dire housing market, they still guarantee to make an offer for your home.

This week the government has announced a £1bn package of measures designed to help homeowners through the current financial crisis.  Whilst everyone must surely welcome this news, the question as to whether it will go any way towards resolving the stagnant housing market remains unanswered.

In brief, the measures include:

• raising the threshold at which stamp duty becomes payable on property     purchase from £125,000 to £175,000 – effective immediately
• more government help with mortgage interest payments for those on income support or claiming job seekers allowance, plus a reduction in the length of time such people have to wait before they’re entitled to this help (a reduction from 39 weeks to 13 weeks)
• raising the threshold of the loan value on which people on income support and job seekers allowance can get help with interest payments – up by £75,000 to £175,000
• £200m into a scheme whereby ‘social landlords’, such as councils and housing associations, will help homeowners who get into difficulties – perhaps through part ownership or additional lending

Some first time buyers who have been putting off the purchase of their first home may be persuaded that this is now a good time to enter the market.  If this happens it could provide a kick start to the bottom property tier and help those in existing chains to complete.  However, there is scepticism over the effectiveness of these measures because none of them address the issue of money supply, which has been at the heart of the credit crunch  The number of mortgages being approved has fallen by more than 70% over the past year – a trend that is expected to continue.  Without funds available for first time buyers and others, the housing market seems doomed to remain in its current state of malaise.

Interest rates were held at 5% by the Bank of England at its meeting on 4 September – the fifth month in a row that rates have remained static as the Bank struggle to contain rising inflation.  The threat of a recession could, however, mean that the Monetary Policy Committee elect to reduce interest rates very soon in an attempt to buoy up a flagging economy.

Homeowners in debt should study these new measures carefully.  Some could find that the help on offer from the government is enough to see them through current difficulties, but inevitably there will be those for whom the situation is too dire or the financial problems too deep.  If you are facing the possibility of losing your home, talk to Property Rescue about their guarantee to buy your property.  Their service could allow you to stay in your home, rescue your credit rating and get through the hard times ahead.  Contact them for an informal chat without any obligation.

To have your home repossessed is one of the most stressful things that can happen to a family, putting adults and children alike under enormous pressure.  The financial impact is often severe and long lasting, affecting individuals' ability to obtain loans, credit and mortgages in the future, and sometimes leaving them with debts that need to be repaid without an asset against which to secure them.

The Council of Mortgage Lenders (CML) expects to see a dramatic rise in home repossessions this year but stresses that its members view repossession as a last resort.  The Financial Services Authority, which regulates all lenders, requires policies to be in place that offer alternatives to repossession wherever possible.  If you are facing the threat of repossession, ask your lender to see their arrears management policy and if you don't understand it, request an explanation.  They have an obligation to treat you fairly so if you don't think this has happened you should take advice on what to do next.  Start by talking to your lender, but other agencies such as the Citizens Advice Bureau and the National Debt Helpline will be willing to provide you with free advice.  

But it's also up to you to help yourself.  The CML strongly recommends that you get in touch with your lender as soon as you start experiencing financial difficulties that mean you can't pay your mortgage.  If you let your lender know what's going on, they are more likely to be able to help you manage your loan.

Property Rescue offers ways of avoiding repossession for those who have no alternatives and are under threat from their lender of losing their home.  There are two schemes that are available:

• Selling Up
  Although no one wants to sell their home under these circumstances, it is  almost always preferable to the alternative of repossession.  Selling will not realise the full market value of your home, but it will provide a realistic price, a  guaranteed sale and leave your credit rating intact.
• Sell and Rent Back
  These schemes have come in for criticism in the media recently on two  counts: firstly that the value offered by ‘sell and rent back' providers is too far  below market value, and secondly that the terms of the rental agreement are  not explained clearly to the sellers.  Property Rescue guarantees to make all  the necessary information available to you up front so that you have a chance  to ask questions, take independent advice if you wish, and come to your own  decision.  No pressure is put on you to proceed if you decide not to.  They  make no secret of the fact that the market value of your home will not be  achieved by selling in this way, but in a sliding market many people feel this is  a sacrifice worth making.  The sell and rent back scheme from Property  Rescue allows you to stay where you are and lifts the threat of repossession.

One thing all parties are agreed on is that it is never a good idea to avoid repossession threats.  They won't go away and they need you to take action.  For information on either of the schemes outlined above or an informal chat with the team of experts, simply call Property Rescue.

Today's meeting of the Bank of England's Monetary Policy Committee decided that bank rates should stay at 5.0%.  This means there has been no movement in the Bank rate since the 0.25% cut on 10 April.

The Bank is concerned about the level of inflation, which at 3.0% is ahead of government targets.  A report published by the Bank during May expressed fears that inflation could get out of hand if interest rates were lowered.  But many people are harbouring a suspicion that inflation is already ahead of published figures.  Rising fuel, utility bills and food costs (which are estimated to be up 6% on last year) means that people have no choice but to spend extra on life's essentials.  Many luxury goods have dropped in price, which might be comforting if you're shopping for a new TV but no use at all if the weekly budget doesn't stretch to cover your child care costs.

Economists are divided into those who think interest rates will have to rise to keep inflation in check, and those who think they will fall but probably not until late in the summer or early autumn.  Rising interest rates will put pressure on the demand for pay increases and will affect an economy already in slow-down mode, but for the home owner they could be disastrous.

Those with high mortgages are feeling the pinch, and not just because the mortgage repayments have risen.  Other essential costs are now so high that careful budgeting is required if the income and outgoings are to balance.  With no interest rate drop in sight, no end to what seems like ever increasing petrol prices, and murmurings that food has been too cheap for too long, what can the hard-pressed homeowner do?

Budgeting is vital to stay afloat.  It can be useful to check your own inflation rate by looking back at bills from six months or a year ago, seeing what has risen the most and targeting those items as ones on which you need to economise.  If you are unable to meet your mortgage repayments it is worth asking your mortgage or loan company if they can help by reducing interest payments for a period of time, or extend the term of the loan to make repayments more affordable.

If you need to sell up to pay off your debts you are unlikely to find much encouragement in the housing market, which continues to slow.  The Halifax reported a drop of 2.4% in house prices during May, continuing the downward trend.  It's not all bad news as the drop will help first time buyers get on the housing ladder and, over time, stimulate the market, but it remains gloomy reading for anyone wanting to sell quickly.

With Property Rescue you WILL be able to sell your home fast because they promise to make a guaranteed offer for any home in any location, and in any condition.  Simply call them for details and a no-obligation valuation of your home.  Don't leave financial problems unattended or pretend they're not happening; these decisions are painful and difficult but are always better tackled head-on.  The advice from Property Rescue is free and in confidence.

Recent repossession statistics show that there is no slow down in the housing crisis.

The current figures must be seen against the backdrop of 2007, which had been forecast to be a bad year by the Council of Mortgage Lenders even before the credit crunch hit.  But despite these predictions, 2007 ended with the actual number of repossessions standing at 27,100, well below the 30,000 the organisation had expected.  This represents less than 1 in 400 mortgages, but remains an increase on the previous year of around 21% and means that repossessions have been steadily rising over the last 8 years.

The Council of Mortgage Lenders has set the expected number of repossessions for 2008 at 45,000, blaming factors such as the issues currently affecting the global economy and the restrictions on lending.  If they are correct, 1 in 300 homes will be taken back by lenders this year.  With such a marked increase in their forecast, are the experts at the CML on track?

According to the statistics published by the Ministry of Justice on 9 May, the first quarter of 2008 shows a 9% rise in possession orders over the last quarter of 2007.  If this trend continues then the CML's forecast is very near the mark.  The 9 May figures represent a 17% growth in the number of homes repossessed when compared to the same three months in 2007.

It should be remembered, however, that there are 11.8 million mortgages in the UK and the current figures are not even close to those experienced during the property crash of the early 1990s.  No-one would argue with the fact that the market is seeing a slow down, but the jury is still out as to whether it qualifies as a ‘crash'. 

The human factor in all this is that every one of these statistics represents heartache and distress for those who lose their home and have to accept the financial consequences.  Many people think that repossession is inevitable, but that's far from the truth.  Even if mortgage payments cannot be kept up and threats are being received from lenders there are still options.  The golden rule is to communicate with your lender if you are having difficulty in meeting your repayments – and talk to them before the situation gets out of hand.  If your home is under threat you can stop repossession by selling to Property Rescue, who will guarantee to buy it at a valuation they will prepare for you.  This service has provided a lifeline to many families who have been just days away from repossession taking place, demonstrating that it is never too late to take action.

If mortgage arrears are getting you down and your home is under threat, don't delay.  Contact Property Rescue in total confidence.  Their experts will not pressure you into making a decision that you're not happy with, but they will be pleased to explain everything to you in a straightforward manner, without any obligation.