MORTGAGE ARREARS REPAYMENTS RISE IN YORKSHIRE AS INFLATION FALLS AND GDP IMPROVES

11th December 2012

The recently announced rise in GDP and fall in inflation are together contributing towards an increase in the proportion of home owners across Yorkshire who are able to pay off previously missed mortgage payments - according to research by leading field agency business Ascent.

The field agency firm, which is owned by law firm Irwin Mitchell, has revealed that 62.3% of home owners across Yorkshire included in its Domestic Arrears Report, promised to pay back at least some of their defaulted debt to lenders in the previous three months. This compares to 55.4% during the same period in 2011. The findings follow a wave of positive economic data which includes a 1% increase in GDP in the third quarter of 2012 and a fall in inflation to 2.2% during September 2012. Niall Gilhooley, Chief Executive at Ascent, said: -The latest economic data is certainly more positive and of course it's early days. There are a wide range of issues as to why an individual could fall behind with their mortgage and then struggle to pay back the arrears. Confidence in the economy and slightly more disposable income are a contributory factor and this certainly seems to be feeding into our own data. -There are however many factors on the horizon that could have an impact. Rising winter fuel bills and the added cost of the festive period could push the figures in the other direction, or mean that the rise in defaulted debt repayments flattens out.  What is certain from what we have seen over the last four years is that home owners are working closely with their lenders to do all they can to ensure they keep hold of their home. Ascent launched its Domestic Arrears Report in 2009 to analyse trends in defaulted mortgage debt. The study, which now includes data from almost 27,000 households across the UK, incorporate Ascent's 'Default Debt Paid' index (DDP) - a figure which illustrates the proportion of home owners paying back at least some of their defaulted mortgage debt. Since the previous recession in 2008/09, Ascent's DDP index across the Yorkshire region has risen gradually from a level of 41.1% to 62.3% in the most recent quarter. In addition to an increase in the number of people paying back at least a proportion of their mortgage arrears, there has also been a significant rise in the proportion of home owners paying off all their outstanding defaulted debt. In 2009, no home owners were able to pay off all their debt in one go, whilst currently 2.57% are clearing all their arrears completely. Home visits are carried out on behalf of most mortgage lenders after a household has defaulted on their mortgages. During the visit, or phone interview, counsellors discuss the outstanding arrears and aim to develop a sustainable and affordable payment plan for clearing the debt.