Business Property & Mortgages

Thursday 18 July 2019

Long-term arrear numbers remain high despite economic rebound

Brokers’ Rachel McGovern
Brokers’ Rachel McGovern

Charlie Weston Personal Finance Editor

THE stubborn mortgage arrears problem shows no signs of going away.

The latest Central Bank figures show there has only been a small drop in the number of homeowners who have built up years of missed payments.

Just over 28,000 residential mortgage accounts were in arrears for more than two years at the end of June.

This has only fallen by 1,272 accounts since the beginning of the year. And the data indicates that the pace of the reduction in long-term arrears is slowing down.

Persistently high long-term arrears remain despite sharp falls in unemployment and the strengthening economy. It is 10 years since the banking-induced economic collapse, but this country continues to have some of the highest arrears levels in Europe.

The numbers in long-term arrears - those who have missed more than two years of payments - now represent 42pc of all residential mortgage accounts in arrears.

Almost €2.5bn has been built up in missed payments. This works out at average arrears of roughly €87,300.

Four out of 10 of those in long-term arrears are failing to engage with their lenders, according to a Central Bank study earlier this week.

This means around 11,000 mortgage holders are ignoring efforts by their lenders to sort out their arrears situation. Those not co-operating may be engaged in a "wait-and-see" strategy, hoping that by holding out they may get a better deal from their bank. Brokers Ireland said long-standing arrears cases remain persistent. Rachel McGovern of the broker body accused banks of a "lack of realism when restructuring mortgages".

Irish Independent

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