Saturday 3 December 2016

Number of homeowners in arrears soars to 50,000

Charlie Weston and Laura Noonan

Published 20/05/2011 | 05:00

THE number of homeowners in arrears on their mortgages has jumped by 5,100 to almost 50,000 in the first three months of the year.

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The arrears figure represents 6.3pc of the 782,429 residential mortgage accounts, according to the Central Bank.

Meanwhile, another 36,600 homeowners, who are not in arrears, have made arrangements with their lender to reduce their repayments.

This means that a total of 86,211 homeowners -- 11pc of all mortgage-holders -- were struggling to meet their repayments in March, the Central Bank said.

While the trend is worrying, eight out of every nine mortgage holders are still meeting their original repayment commitments.

Frank Conway of personal finance website MoneyCoach added that although the growth in the arrears was unfortunate, there was no rapid deterioration in the rise in rate of arrears.

"These latest statistics largely include the effects of the introduction of the universal social charge in January, as well as the various rate increase announcement by a number of lenders on their standard variable rate customers during the first quarter."

Figures released yesterday by Irish Nationwide showed that more than one in five, of its residential mortgage holders are now in arrears.

This was attributed to the burden of personal debt, higher taxes, rising food and energy prices and increased interest rates.

Across all lenders, 63,000 people have gone to the lender and had their mortgages restructured, but more than 26,000 of these are still in arrears.

Around 25,000 of these mortgage holders were now at least a year behind on their payments, Ciaran Phelan of the Irish Brokers Association calculated.

Solution

"There is clearly a solid group of 25,000-plus individuals who haven't been able to meet their mortgage payment for 12 months or more and are therefore are largely outside the protection of various consumer codes," he said.

He added that the Government will need to co-ordinate a debt solution for these people, unless it has 25,000 social homes lying empty.

"Whether the solution is called debt forgiveness or debt restructure, it will ultimately have to happen, as the vast majority of these people will never be able to repay these mortgages."

Analysts calculated that the average owed by those who are a year or more behind on their payments was €21,500.

The figures also show that 140 homes were repossessed in the first three months of the year, up from the 106 repossessions that took place in the final quarter of 2010.

During the first three months of the year 231 court proceedings were conclude. Courts granted repossession orders in 136 cases, while in 111 cases the courts made orders to enforce the security on the mortgage.

Irish Independent

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