Property Rescue Blog

Those were the words of Mervyn King, the Governor of the Bank of England, during his speech to Bankers in the City on Wednesday.  The picture painted by Mr King was dire, but however we like to look at it, the changing economic landscape means we’ll all have to put our hands in our pockets.

Mr King warned against a culture of pay demands to provide for increased household costs, a sentiment that is likely to be unpopular on the high street where the average consumer is feeling the pinch as gas, electric and oil prices continue to rise.  Further warnings came this week with the news that gas and electric could rise by up to 40% by the end of this year, pushing more and more people into debt or poverty, or both. 

So why doesn’t Mr King want wages to rise to pay for all this?  Looking back to the 70s, inflation was out of control and so were wage increases driven by union demands.  No one would want that situation to return, but are the key factors the same now as they were then?  Price rises are highest in essentials such as food, petrol and heating; luxury items are costing less and less, trade unions have lost the power they once had, employment figures remain relatively stable and the overall rate of inflation is only 3.3%.

Despite this, the Bank of England relies on interest rates as its key weapon in the attack against inflation.  If wage demands get out of hand inflation will go up.  In order to curb that, Mr King would need – and has threatened – to increase interest rates, which in turn would lead to pressure on businesses, a rise in unemployment and an increase in home repossessions. 

The uncertainty therefore continues.  No home owner with a large mortgage can rest easy, even if they have a good level of income.  Negative equity is knocking at the doors of many recent purchasers and the threat of further economic hardship when winter fuel bills drop on to the doormat, is bound to affect many.

If you think you are likely to face financial problems try to pre-empt the situation by talking to one of the voluntary bureaus that will help you with budgeting and, in some cases, liaise with your debtors on your behalf.  If you stand a chance of losing your home through repossession, talk to Property Rescue.  Their guarantee to buy your home could mean the difference between becoming bankrupt and remaining solvent.   You could even stay in your home as a tenant after it has been sold to Property Rescue, enjoying all the rights that tenants normally have, without the disruption caused by moving to another area.

For further information or advice, call Property Rescue today.  Their experienced advisers will talk to you in complete confidence and without any obligation.

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.

According to the Insolvency Service, more than 106,000 people declared themselves bankrupt or entered into a Individual Voluntary Arrangement (IVA) during 2007.  Although that was a very slight decrease from 2006 figures, the outlook is poor according to many in the finance and lending world.

The Financial Services Authority estimates that during 2008 around one million people could find themselves in a position where they cannot make repayments on their mortgage.  The pessimism is partly due to fixed rate mortgage deals, a lot of which will end during 2008, plus the increasing strain on household budgets.
 
After a period during which credit was widely available people everywhere are finding credit harder to obtain and are, therefore, being forced to tighten their financial belts.  Increases in household bills, especially heating, are hitting hard, as are steep rises in the cost of petrol – two items of expenditure which most of us consider to be essentials.

If financial problems are getting out of hand it can be useful to seek help from a voluntary or publicly funded organisation; for example the Citizens Advice Bureau provides advice on budgeting and paying off debt.  Keeping the lines of communication open between homeowner and lender is also important, as ignoring mortgage arrears most definitely won’t make them go away.

Any defaults on loan or mortgage repayments will be recorded by companies like Equifax, which compiles credit data.  If you can negotiate a longer term over which to repay the loan, or agree to pay interest only for a while, you might help avoid tarnishing your credit rating.  But this will need to be done before you incur any arrears if it is to be effective.

If you have had your home repossessed or declared yourself bankrupt your credit history will reflect this and your ability to get future loans will be affected.  Property Rescue has dealt with many people who are at the very point of repossession and yet they have still been able to stop repossession going ahead, saving their home and rescuing their credit ratings.  Property Rescue has access to funds that allow them to make almost instant decisions and buy in the shortest conceivable timescales.

Property Rescue’s valuation is fully inclusive of legal fees on the sale of your home  There are no hidden extras, so the price quoted is the price you will get at the end of the day.  They will arrange for your outstanding loan(s) to be repaid and will put any remaining money into your nominated bank account, leaving you with a choice of moving into rented accommodation until you get back on your feet or downsizing to a less expensive home.

Property Rescue do not pressure people into selling and promise to explain the process to you clearly.  Give them a call for more information and a chat in complete confidence.

The latest news on home repossessions makes for gloomy reading.  According to The Council of Mortgage Lenders repossession is at its highest since 1999; 27,100 homes were repossessed during 2007 against 22,400 in 2006.  The organisation warns of further rises as we go through 2008 and householders see an impact from rising energy prices and increases in bank lending rates. 

The repossessions figures have led to some political debate about whether lenders are being strict enough in the criteria they apply when giving out loans.  Sparked off by the US sub-prime mortgage crisis, the banks and building societies in the UK will perhaps be a little more cautious when they look at the risks involved in making funds available to new borrowers, especially those who already have other debts or outgoings.   Commentators are warning that borrowers with tarnished credit histories will find it more and more difficult to raise finance, with lenders either flatly refusing them a loan or else heaping on penalty rates to such an extend that the loan becomes unaffordable.

The Citizens Advice Bureau is one of the agencies who often see people at a time of crisis.  They offer free advice to those who are facing any sort of consumer problem or mortgage issue.  The CAB believes that mortgage lenders aren’t always doing everything within their power to help people who are facing repayment difficulties.  They point out that court action should be a last resort rather than a first option and urge lenders to negotiate with their borrowers to find a way through the problem. 

For those facing the threat of repossession it may seem like all the options have disappeared and the inevitable outcome will be the loss of their home.  With Property Rescue this need not be the case.  They can step in at the last minute to stop repossession.  Property Rescue guarantees to make an offer for residential property anywhere in the country, regardless of its condition or location.  Their access to a network of funding allows them to act quickly to make an offer for the property under threat.  The home owner, if they accept the offer from Property Rescue, can either walk away with the cash that remains after their mortgage and debts have been paid, or they can remain in their home as a tenant after the sale has gone through.

Call Property Rescue if you are under any threat of repossession.  Their service just could be the option that allows you to stay in your home and re-build your financial future.