House Repossession Hotspots

Surprising as it may seem, home-owners in the South are far more likely to lose their homes than their Northern counterparts. National charitable organisation Shelter have analysed research, presumably drawn from reliable testing, and claim that the boroughs of Dagenham and Barking are at higher risk of suffering from house repossessions.

Interestingly, most of the rest of the top ten so-called hotspots are made of the more usual candidates, those being locations in the North, in particular areas of the North West. Still, three of the ten are given over to areas in and around London and that does but a different spin on things.

Generally those living in the South are viewed as being more affluent that those living in more Northern climes, and whilst many a politician and spin doctor would try to convince you otherwise, the North/South divide does exist. Southerners have always been thought of as better off, as being financially solvent, with access to a higher standard of living than residents anywhere else in the country.

However, Shelter’s current thinking sheds a slightly different perspective on the whole repossession debacle.

In a nutshell, what Shelter are trying to point out is this: no matter where you’re from, or where you live, your mortgage is still your single biggest outgoing. Unfortunately, despite lower interest rates and various attempts by the big lenders/ Bank of England to help out home owners, the cost of living continues to rise. This has a knock-on effect with regard to how far the average wage packet now has to stretch.

Once the tax man’s had his cut, he continues to dip in and out by way of stealth taxes, fuel duty, VAT and interest on loans. Then there are the utility companies, all upping their pricing bands despite warnings to the contrary. And let’s not get started on the rising cost of the weekly shop.

The beleaguered home-owner is left with an ever-dwindling pile of cash, and this then leaves him more open to repossession. Shelter’s advice? Don’t put off the need to discuss your mortgage if you’re starting to struggle. Our advice? What Shelter say.

A Spanish protest

A Spanish protest.

As we come out of the socialist party offices, past the gleaming bust of Karl Marx which stands inside the doorway, suddenly I heard it, witnessed it, the Spanish reaction to property foreclosures sweeping the country, the sound of my very first cacerolada, the tactic is copied from Argentina when it also went bust in 2002, the idea lacks subtlety yet  appears to be affective, protesters block the streets banging pots and pans, these particular protesters are women, office workers mostly aged over 40 and well dressed,  they have spread themselves in a line across the road, blocking the traffic  at one of Madrid’s busiest intersections, they bang their pots and pans and chant, “the bailouts are rewarding the Banks” they say, but insist they  are doing nothing to ease the suffering of families laid low by the economic crisis. People are losing their jobs a woman tells me, decent families with children, living on the street, surviving on handouts and charity. This was one of many caceroladas I have witnessed in the last two weeks.

When Bankia Spain´s fourth largest banking group had to ask for a 4 billion euro bailout, followed by another  19 billion when the initial 4 was not enough I saw the same type of protest involving pots and pans again, deployed primarily outside many of its branches.  But Spain’s problem is not just its banking  system  the country’s economy  was buoyed up for a decade by the very property boom that the banking system fed, so now they are left with bankrupt banks and a shrinking economy,  with protests  happening up and down the country and no decisions as of yet by the government, the situation is set to worsen with one in four unemployed,  people from all sectors seeing their wages and pensions cut, all kinds of ordinary people have taken to the streets using methods copied from and sometimes aided by the M15 movement the hard core anti capitalist youth movement who occupied Spain’s Plazas over a year ago, but the new breed of  protesters are well aware that the constant  banging of utensils on Teflon is at the moment merely  acting as a kind of release valve on the feeling of social discontent.

Later I met a group of squatters who had occupied a block of flats in Seville after losing their own homes to repossession; they were planning a protest of this kind themselves outside the electricity company headquarters that had just recently disconnected the electricity to the building. The squatters mainly families, calling themselves Barrios en Lucha which translates as ‘neighbourhoods in struggle’ were evicted from their own homes when they were repossessed by the banks, released a statement

‘Twenty families in urgent need of housing, organised through the 15M movement, have squatted an empty building in Avenida de Juventudes Musicales, (the Avenue of Musical Youth!) to make homes for themselves there under the name of Patio of Neighbours “La Utopia” and to “make visible the terrible housing problem that so many people suffer. The building has been empty since it was completed in 2010. Instead of it sitting empty, twenty families have made it their home’.

The building in question  is an empty apartment block, never been lived in since it building work was completed in the year 2010,  it was previously owned by a large property company, since declared bankrupt, it is presently owned by the bank Ibercaja, the number of families now squatting has recently  risen to 36, some had simply fallen into rent arrears and been evicted, but the majority were still the victims of bank repossession, the people inside are a mixture of ages from the very young to the very old, some in a state of serious ill health, but even this has not stopped them being constantly harassed  by the local government, water and electricity have been disconnected, One woman I spoke to was previously living in a block of flats from which thirty families have been evicted, in an area called La Macarena which has the highest rate of mortgage foreclosures in Seville. If this continues I fear a lot more cacerolada´s will be heard ringing through the streets Spain.

Property Repossessions – How Are We doing?

There are many things in life that are stressful, and property repossessions has got to be one of the worst. During the last 3 or 4 years, foreclosure procedures on both sides of the Atlantic has caused countless families to lose their homes.

Whilst recent reports in the US state that repossessed homes are on the downturn, a closer look at figures would suggest otherwise. The recent figures are de facto but the speed with which properties are being processed is more the deciding factor re the numbers than an actual slow down in repossessions.

It’s no different in Europe, with vast numbers of Spanish home owners losing their homes on a daily basis. In the heart of the financial mess is Mercia, an area widely advertised a few years back as being some kind of Mecca for overseas property developers. Ordinary home owners were also targeted, with many a UK resident jumping ship and buying what they thought would be their Spanish Shangri-la.

Fast forward to the Spring of 2012 and disaster abounds. Properties are unfinished, complexes deserted. Beautifully constructed blacktop stretches for miles, then simply terminates. Manicured and lovingly tended golf courses are little more than expensive, ornamental landscaping and hotels, stores and bars remain unused.

The Spanish banks are groaning with the effort of trying to sustain a weakening economy and the rest of Europe has averted its eyes whilst praying for a financial miracle. Elsewhere, in the UK reports were published (at the end of May) that stated that house prices had fallen below those enjoyed during 2005.

In seven years, the UK householder has seen a significant drop in the value of property, and just like their American counterparts, it doesn’t look as though things are going to change anytime soon. Property repossessions continue to increase, despite the fact that UK banks have tried to create a better relationship between themselves and their borrowers.

Ireland fares no better, with house prices continuing to fall, and looking elsewhere in Europe it looks as though the entire continent is barely managing to keep a roof over its head. What does all this mean for the average home owner? Simply that you’re not alone, and that the world continues to struggle to regain the financial foothold it enjoyed prior to the 2008 crash.

What can you do to avoid going through a property repossession?

  • approach your bank/lender and discuss your future options. Banks aren’t gaining anything from foreclosures, so see what they can offer by way of support and negotiation. Ask for an extension, see if you can alter the terms of your mortgage; in short explore your options with your lender
  • if it’s possible to do so, try and sell your home. Better to off-load debt that you can’t manage, than to hang on for grim death
  • consider renting. There remains a high demand for rental property, and it may well be worth you moving out and renting your home out, whilst you (in turn) rent somewhere for yourself
  • seek financial advice elsewhere. There are a variety of charitable organizations around the country, make an appointment

Whatever you do, don’t hand your keys over and walk away, Turning your back won’t solve anything in the long term, and you may well find yourself before the court for more than just the mortgage debt itself.

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