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시장보고서

The Impact of Increased Arrears on UK Mortgage Providers

리서치사 Datamonitor
발행일 2009년 04월 상품코드 85260
페이지 정보 18 pages
가격
US $ 2,795 ￦ 3,330,200 PDF by E-mail (Single User License)
US $ 6,988 ￦ 8,326,200 PDF by E-mail (Global Site License)


영문목차

Abstract

Introduction

As the economic situation deteriorates, more borrowers are falling into arrears on their mortgage repayments. This has led to an increase in repossessions although measures are being taken by lenders and the government to advise those in difficulty and actively help those most at risk. This brief looks at what is being done by all parties to reduce arrears and prevent repossessions.

Scope of this research

  • Analyzes increased arrears and repossessions in the UK mortgage market.
  • Assesses the advice being offered by lenders to help those falling into arrears.
  • Discusses the measures being taken by the government and any shortcomings there may be.

Research and analysis highlights

The percentage of mortgages three or more months in arrears grew from 1.10% in Q4 2007 to 1.88% in Q4 2008. The fourth quarter of 2008 saw 10,400 repossessions, a decline from the 11,100 seen in Q3 but greater than the 6,900 in Q4 2007.

Voluntary abandonment cases are on the increase. Mortgage providers such as Northern Rock have commented that they have been seeing an increase in cases since the summer of 2008, although the figure does not show up on official repossessions data because no court order has been issued during the process.

The Homeowner Mortgage Support Scheme does not go far enough. Credit Action has warned that the repayment holiday would only bring temporary relief as interest would continue to accumulate and be added to the overall loan. Meanwhile the Income Support for Mortgage Interest Scheme only aids those on long term benefits.

Key reasons to purchase this research

  • See how arrears increased in 2008 and discover why consumers fall into arrears through Datamonitor' s proprietary Megatrends framework.
  • Gain an insight into the strategies being used by your peers to deal with consumers who have fallen into arrears.
  • Understand what measures are being taken by the government to prevent borrowers having their homes repossessed.

Table of Contents

DATAMONITOR VIEW

  • CATALYST
  • SUMMARY

ANALYSIS

  • As the level of arrears increases, lenders need to find ways to help consumers
    • Around 1.88% of mortgages were in arrears at the end of 2008
    • The loss of one' s job or the failure of one' s business are the main drivers of arrears
    • Datamonitor' s Megatrends framework can provide more insight into why consumers fall into arrears
    • Communication with borrowers is seen as a vital tool against increased arrears
    • Special servicers help lenders to manage arrears more efficiently
    • Lenders have a variety of measures in place to help borrowers who are in arrears
  • Repossession is seen as a last resort as it can be costly for both parties
    • Repossession levels were lower than anticipated in 2008
    • A few lenders have introduced a controversial six-month delay on repossession orders
    • Most lenders follow a standard process when taking possession of a property
    • Some providers have noticed an increase in voluntary abandonment cases
  • Various regulatory measures are being introduced to reduce arrears and repossessions
    • The Homeowner Mortgage Support Scheme has been set up to help defer repayments
    • The Income Support for Mortgage Interest scheme has had an overhaul to make it more effective
    • The mortgage rescue scheme allows housing associations to rent property back
    • The Pre-action Protocol is a government initiative to further postpone repossessions
    • There has been a call for laws to be relaxed that allow those in arrears more time to pay off the loan
    • The cut in stamp duty may have caused more problems than it has solved

APPENDIX

  • Supplementary data
  • Definitions
    • Voluntary abandonment
  • Further reading
  • Ask the analyst
  • Datamonitor consulting
  • Disclaimer

TABLES

  • Table: % of all mortgages at least three months in arrears
  • Table: % of all mortgages taken into possession during each half yearly period

FIGURES

  • Figure: The percentage of mortgages in arrears grew significantly in Q4 2008
  • Figure: The FSA' s Money made clear guides offer clear advice on all mortgage-related issues
  • Figure: Nationwide' s website provides a convenient source of information on useful debt advice bodies
  • Figure: Lloyds TSB stresses the importance of action on the part of those facing financial difficulty
  • Figure: The percentage of properties taken into possession in H1 2008 was 0.16%
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