Rise in Numbers Defaulting on Mortgages

Press Association – Published 29 Sep 2006 - 13:20 PPI
By Dan McGinn, PA Ireland Political Editor (Ireland special)

More people in Northern Ireland are struggling to meet their mortgage payments, it emerged today.

The Northern Ireland Housing Statistics revealed actions by mortgage lenders increased by almost 20% in the province over the past year.

Homelessness in the province is also up by almost 16%, with 20,121 households falling into the category.

According to the Department of Social Development (DSD), there were 2,614 actions for mortgage possessions in Northern Ireland during 2005–6.

Christopher Dean, a spokesperson for the Council of Mortgage Lenders said the Northern Ireland figures appeared to confirm UK trends.

"When mortgage lenders initiate court actions, it is often a warning to homeowners to sort out their payments and shocks them into sorting things out," he said.

"The number of court actions nevertheless is still low but there is no doubt interest rates rises in recent years are posing problems for some homeowners.

"There has been a slight upward trend across the UK because interest rates rose in 2003 and 2004. We expect that trend to continue."

In August the council report mortgage repossessions in the UK were at their highest for five years, with the numbers of people in arrears stabilising.

It is estimated repossessions will run at levels of around 15,000 a year in the UK between 2006 and 2008.
The DSD also revealed:

• The average price of a house, according to the Valuation and Lands Agency, during 2004–5 was £113,900 – £16,200 more than 2002–3.

• The average rent per week in Northern Ireland in 2004-5 was £61.90 –£42.96 below the UK average.

• The total number of Housing Executive tenancies fell from 93.477 in March 2005 to 90,931 a year later.

• The number of dwellings sold by the Housing Executive dropped 16.7% from the previous year to 2,683.

Sinn Fein's Fra McCann said the figures showed there was a housing crisis, with over 20,000 people presenting themselves as homeless and yet only 8% of all new builds occurring in the social housing sector.

"There must be a fundamental recognition that the failure to meet the demand for social housing is unsustainable," he said.

"This demand at present is being met by private landlords, who are already seriously distorting the housing market and in some cases making millions in housing benefit payments."

The West Belfast Assembly member also expressed alarm at the increase in mortgage payment problems and at the rise of 13.6% in the price of National House Building Council-registered houses.

"Many young people are unable to get into the housing market because of property speculators who are forcing up prices and many young families are taking on mortgages that they simply cannot sustain," he said.

"At the same time the huge gap between demand and supply in social housing is being filled by the same property speculators."


Useful links

NI Housing Bulletin