nyone who owned property between now and the early
during the last house price nineties, dig a bit deeper and
crash in the early 1990s there are quite a few signs that
will remember constant headlines everything in the garden might
about negative equity and home not be as rosy as we would all
repossession. Between 1990 and like it to be.
1996 over a million individuals
experienced mortgage repossession Take household debt for example,
as they struggled with mortgage now at over £1 trillion. Or to
payments when interest rates put it another way, around
doubled. £17,000 of debt for every man,
woman and child in the UK! The
A lot has changed since then. The Nationwide Building Society
U.K. economy is much more stable, recently calculated that debt is
we live in a low-inflation now at a record 2.75 times
environment and the Chancellor’s disposable income compared with
decision to pass responsibility the previous record of two times
for setting interest rates to the income in the early 1990s.
Bank of England is acclaimed by
many as a master stroke. So, not Or interest rates. They may be
much chance of a repeat of the low – but the five successive
early 90s misery, then? interest rate rises last year
actually equated to a 35%
“It’s different this time” has increase! As rising house prices
been the downfall of many a in recent years have encouraged
pundit, whether they are many people to take out the
referring to stocks and shares, biggest mortgage they can get,
the housing market, or anything this type of increase will have
else. Because whilst there are been very unwelcome!
certainly many differences
Or employment. A record 28.3 receives hundreds of calls each
million people are in jobs. week from people worried about
However many of these are losing their home because of
part-time or short-term eviction as a result of home
contracts. Many more have repossession by a mortgage
benefited through the massive lender. He suggested sticking to
increase in public sector the following 10-point checklist:
employment. But if the economy
wobbles, and particularly if as
many predict the government needs 1. Don’t panic. Lenders normally
to reduce public spending, these use home repossession as a last
jobs are vulnerable. resort. The first thing to do is
to talk to them, explain the
So maybe it’s not so surprising situation and ask for their
that figures from the Council of support. Many of them will be
Mortgage Lenders show that the able to offer repayment holidays
number of home repossessions or a short term reduction in the
increased by a whopping 70% in monthly payments, instead of
2005 compared to 2004, with the repossession. You can request
trend looking set to continue that your repayments be converted
this year. to ‘Interest Only’ which can
significantly reduce monthly
If you are in danger of home repayments.
repossession, or might be
affected in the future, what 2. If you can’t afford to pay
should you do? what they request, pay them a
regular amount that you can
We asked Richard Watters, afford – this demonstrates that
Managing Director of A Quick Sale you are trying and haven’t lost
Ltd. for his views as his company control of the situation.
size="-2">http://www.citizensadvi
3. Know your rights. Your ce.org.uk/
property can only be repossessed
after a court hearing and judges 6. If the case goes to court –
are sympathetic to people in always attend the repossession
these situations, particularly if hearing. Explain your situation
they have children. and suggest a period over which
the mortgage arrears can be
4. Understand the process. The repaid. Always suggest a plan you
website href="http://www.a-quick-sale.co. this means the mortgage arrears
uk/repossession/" will not be cleared until the
title="http://www.a-quick-sale.co last monthly payment is made in
.uk/repossession/" 20 years time!
target="_blank">color="#001000" 7. In most cases the court will
size="-2">http://www.a-quick-sale grant a suspended possession
.co.uk/repossession/ order. This means that if you
has information on how the home stick to the agreement to repay
repossession process works. arrears, you won’t be evicted and
your home won’t be repossessed.
5. Get legal advice or speak to
your local Citizens Advice 8. If the court grants the Lender
Bureau. Don’t try a DIY job – a possession order, you will
your home is too important! href="http://www.citizensadvice.o move out – otherwise you will be
rg.uk/" evicted. It is often possible to
title="http://www.citizensadvice. find a buyer within this period,
org.uk/" target="_blank">color="#001000" house. You may have to accept
less than you would like – and are able to offer a rent-back
might end up with little in your option so you can continue to
pocket - but this is usually live there.
preferable to home repossession.
Some property-buying companies
About the Author:
Michael is a keen writer, and internet marketer living in Scotland: Contact details: E-mail: samqam@googlemail.com Phone: 0131 561 2251 Michael's Website: Taxi Belfast
Read more articles by:
Mr Hanna
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