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Britain's beleaguered mortgage borrowers are likely to escape the scale of home repossessions suffered in previous economic crises due to higher levels of home equity and regulatory pressure on lenders, market experts say. With 1.4 million households set to pay off their fixed-rate mortgages over the course of 2023, most taken out two to five years ago at rates much lower than today, the pressure to meet skyrocketing payments has combined with a cost-of-living crisis and a bleaker outlook. inflation outlook. But while borrowers face higher costs, the mortgage crisis has not yet resulted in massive foreclosures. Just 1,250 mortgaged properties were taken into possession in the first three months of this year, according to industry group UK Finance. This was up 50 percent from the previous quarter, but compared to the numbers who lost their homes during the recession that began in 1990, the all-time peak for foreclosures, it barely registers.
Between 1991 and 1993, lenders repossessed some 188,600 homes, according to UK Finance. The reasons for this apparent difference lie in mortgage market trends, the history of house prices and sweeping Russia Mobile Number List regulatory reforms, market experts say. But they warned there was plenty of room for uncertainty given the unpredictable economic outlook, particularly when it comes to employment. “I don't think we should expect foreclosures to increase to the extent we've seen during previous recessions,” said Neal Hudson, founder of housing market analysts BuiltPlace. “For lenders and regulators, they should be the absolute last thing they do. But that doesn't mean we won't see them rise. We will do it." An increase in repossessions would increase pressure on Rishi Sunak, the prime minister, who has rejected calls for direct state support for mortgage holders, arguing that fighting inflation was "the best and most important way we can keep costs and interest rates. down for the people.
The Bank of England's official interest rate (currently 4.5 per cent) was in double digits between 1988 and 1991. As a result, most borrowers at that time chose a variable rate mortgage rather than a fixed rate mortgage. a high level. However, this meant that base rate changes affected your monthly payments more quickly. Fixed rates are the norm today. While these will only protect against changes in interest rates for the duration of the settlement, they give borrowers crucial time to plan. In the early 1990s, when house prices fell and sent borrowers into "negative equity" (when the property is worth less than the outstanding mortgage balance), banks and building societies faced few regulatory responsibilities that would require them to offer temporary relief or alternative mortgage options.
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發表於 2024-3-12 17:52:56