October 27, 2005 | posted by Michael Baxter in Uncategorized |

The latest figures on mortgage repossessions make grim reading- but while they are bad- they are not that bad- and we are nowhere near the levels seen in the early ’90s.

According to the Department of Constitutional Affairs, 29,991 mortgage repossessions were entered in the third quarter of this year. That’s 55% up on the same period last year, and the highest level since the third quarter of 1993.

Of the repossessions entered, 10,340 were suspended, taking the total number of court orders to 19,687, the highest level since the first quarter of 1996.

If we widen the net and look at arrears, then the picture is still unpleasant. And the problem area seems to be unsecured debt arrears. Despite this prolonged period of economic growth that the UK has been enjoying, unsecured debt arrears has been rising steadily. Capital Economics reckons that, as a result, bankruptcies will double by 2008, surpassing even the level seen in the early ’90s. And both Capital Economics, and the Bank of England, believe that changes in bankruptcy laws will only have had a small impact on these figures.

Commentators often forget that it takes time for the effect of changes to ripple out across the economy. The interest rate hikes of last year and 2003 are still only just beginning to affect arears.

But, while all this is bad, when we compare the figures with the early ’90s, then all of a sudden, things seem quite mild. Sure mortgage arrears have recently taken a turn for the worse, but then again, until last year had been steadily falling for 12 years, and right now the percentage of mortgage arrears as a proportion of all mortgages is only 25% of the level seen in 1992.