To follow up yesterday's post, that 500,000 households are in negative equity (source: City AM), I shall quote from The Daily Telegraph*:
Shelter’s survey of 2,000 Britons found 3 per cent of households admit to being in arrears with their rent or mortgage, the equivalent of 835,000 – up from 405,000 a year ago. A third of these turn into repossession cases at court, according to Shelter. It equates to every two minutes someone facing the real threat of being evicted from their home.
Home owners are struggling to escape their misery by selling up as estate agents warn they are doing just one transaction a week amid a drop in demand from buyers who are unable to obtain affordable mortgages... It comes amid historically low interest rates, which financial experts expect to rise next year amid rising inflation.
For sure, being in negative equity (or 'underwater') is a different concept to being in arrears, and the bank only cares if you are underwater and in arrears. And for sure, Shelter have their own agenda - historically, they were on the side of the 'dispossessed' but now they are much more Home-Owner-Ist, and are bound to exaggerate things. But that's a heck of a lot of people in arrears, even despite the artificially low interest rates that a lot of them are paying (and despite all the subsidies like Support for Mortgage Interest)
* Via Growler at HPC.
A simple solution
56 minutes ago
4 comments:
Lies, damned lies and statistics: "3 per cent of households admit to being in arrears with their rent or mortgage"
So they've lumped the tenants in with the owner occupiers to make a more impressive figure. It doesn't say what percentage of the percentage are tenants and presumably "repossession cases at court" includes landlords trying to get their property back from non-paying tenants.
B, well spotted, ta.
The other side of this is that if bellyaching about mortgage arrears, you have to specify what degree of arrears. Taking Bayard's point entirely, if of all mortgages only 3% are in arrears to any extent at all, that's good news (inasmuch as it's not more). If you take serious arrears - say 3+ payments down and worsening - and said that they were 3% of all mortgages, that's not good.
If you take the really serious heading-towards-thoughts-of-repossession 6+ and no hope of getting out of it as 3% of all mortgages, that's not good at all but still means that 97% of all mortgages payers are in better shape.
I suspect if 97% of all people were in better shape, say, than Paul Gascoine, the medical profession would probably decide it was doing a splendid job.
Strikes me that this is all winding up to warning off the BoE from raising interest rates next year. When that time comes, and lets hope its not too long. the outrage will be deafening.
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