Homeless for Christmas? Past, Present and Future

1997: The Borrowers - Peter Hewitt

The FSA are reported to be claiming that repossession increased 5.88% from 9,134 to 9,670 between the third quarters of 2010 and 2011. However the Council of Mortgage Lenders state that the figure is 9,200 for the third quarter of 2011 compared to 8,900 for the same period in 2010. The CML figures would suggest a rise of 3.3% over the year. It is possible that the difference in figures is due to the fact that CML cover 94% of the residential lending market, not all of it. Back in 2010 there were 11.4million mortgages in the UK with loans amounting to £1.2trillion. In 2011 there are 11.2 million mortgages in the UK with loans amounting to £1.2trillion (no difference).

Perhaps in the big scheme of things, the difference in the numbers is fairly inconsequential - unless of course you are someone that has been repossessed. These figures are useful indicators about the health of the economy. We currently have the lowest interest rates for many years, yet clearly for some people mortgage payments are still too onerous. Indeed the CML would argue that their data for October 2011 shows that mortgages are the most affordable that they have been in 8 years. In October of the 28,000 mortgages taken up and £4,500m borrowed across the country the average mover took out a 69% mortgage equating to 2.89 times gross income with payments costing 9.2% of income. The typical first time buyer (all 16,400 of them) borrowed a total of £2,000m (average £121,950) with a 20% deposit (£30,500) and had an average income of £38,110 - which is above the national average wage. Lending levels fell by 10% against the September 2011 figures for first time buyers.

The Christmas nativity reminds us of a couple that ended up in a stable and whilst the forecasters appear to have over-estimated the figures for repossessions, they are still very high and over 102 a day. Making sure that your financial planning is properly budgeted is vital to avoid the sort of pressures that some fall victim to. That's why each year we issue a Financial Statement, showing our clients precisely where there money has been spent - but this should be a tool for also looking forward and planning spending in 2012 which ought to take account of yesterdays announcement that CPI is 4.8% and RPI 5.2%. Preparation is everything.

DT