Repossessions up 71%. The mortgage lenders are squarely to blame

I'm so angry! This blog is likely to be more of a rant than seasoned piece of editorial. I'm not going to start quoting figures other than 71%. 71%?!

The number of homes that were repossessed during the three months to the end of June have soared by 71% compared with a year earlier. The Financial Services Authority said 11,054 homes were repossessed in the three months to the end of June, compared with just 6,476 during the same three months of 2007. Okay, just a few more figures to set the scene.

This number is growing, and I can tell you whom is to blame. Not the mortgagee that's for sure. There are some people out there that manage their money badly and as such they fall behind with the repayments they should never, ever default on.

We are talking about good, honest, hardworking people whom own their own homes, and a considerable amount 'buy to let' investors that are now deeply in debt to the mortgage lenders because their fixed rate mortgage has come to an end and now find themselves on a ridiculous rate of interest, with the mortgage lenders refusing to listen to sense and re-negotiate a deal that works for both them and the mortgagee. Landlords that were servicing their mortgage with the rent, or maybe topping up a little have been slapped with additional payments of anywhere between £400 and £800 a month on top of what they were paying before. The bank of England has dropped rates again, but the lenders refuse to pass it on, Northern Rock being the worse culprit and they are state owned!!

Are mortgagee's going to keep up? How can they? And re-mortgaging to another lender is out of the question as property prices have dropped and there isn't enough equity there. So home owners and 'buy to let' investors are faced with only one option. An option they don't want. Repossession.

Why are the mortgage lenders taking this approach baring in mind that the sales market is practically dead? How to they intend to recover their liability when banks wont lend new money at a good rate unless you have at least 20%? The repossessed property isn't going to sell in this market unless you are giving it away. So the loss would appear to be greater for the lender than having them re-negotiate a new deal. So, whats best? Retain a property and more importantly a steady monthly income from the mortgagee at an acceptable interest rate? or go for repossession, have the property sitting empty because it wont sell or will sell but for less than the mortgage liability?

Retain the property and mortgagee of course. So the question again. Why are the banks repossessing? My thinking is that they have posted their losses to the City and Shareholders and have written the liability off. Therefore, what does it matter. If I am right it's a tragedy, else the mortgagee's are dealing with staff in call centres whom are more interested in what they are having for lunch than actually questioning why the computer say no......

The 'R' word and the (un)happy land of Estate Agency

Rrrrrr. Rrrrrr. I can't say it! Maybe if I say it quickly, then maybe it won't sound so bad....recession. For us anyway things aren't so bad, there's no denying its tough going and there are agents all across London in a bit of a panic and some have already folded.

Now depending on your view of estate agents you might think that this a good thing! And perhaps it is. Almost anyone can open up and trade, and many of the less well to do agents have gone South, which is actually a good thing for any prospective tenant and landlord as they can pretty much expect a better degree of professionalism.

However, agents that have traditionally done sales are desperately trying to join the lettings party even though they have about zero experience in it. My case in point, is that I was driving through a London High Street, and as I do, I have a look at every agent along the way to see what they are doing. One large corporate was now doing lettings and they had a big branded poster taking up a whole window and it had a words "come in and find out why our landlords are so happy with us". I almost wet myself. They had been doing lettings for approximately 5 minutes.

Anyone who knows me knows I am anti corporate. Mainly because there's a marketing machine somewhere in the business peddling a load of rubbish at the unsuspecting public, who, to them, are nothing more than a figure on a sales sheet. Better in my opinion, to choose a smart independent that actually wants your business...I mean really appreciates it. An independent is hungry and motivated rather than a corporate that's targeted by a board of directors whom live in a candyfloss castle and rule by fear.

Although I've come off the point a little, recession and credit crunch are just words, and yes, it is difficult out there, but you have to push those words aside and remain focused on your objective.

It's too easy to give up on the things that are hard to accomplish. The only place success comes before work is in the dictionary. Hard work comes first. Success later...

Globrix. Yet another property portal?

I always get a little sceptical when another web portal turns up and the usual sales call arrives pushing the greatness of this portal over another one. The truth is, is the power of the internet drives modern day estate agency with people now no longer touring around agents looking for local property but searching from their computer and the comfort of their desk at anytime of the day or night 24/7 -365.

Most agents harness the power of Rightmove and Findaproperty, whom are like the Coke and Pepsi of the property portals and titans in their respective fields. So when I hear about any new portal, it's met (by me) with a degree of scepticism. i.e "What is this one doing that others arent"?

Globrix says its different. All hail to that I say! (Hijacking some of Globrix content here), Estate agents don't have to come to us (them) with a list of properties that they'd like to promote online, we (they) go to them. Or rather, our (their) ultra-clever software does.

Globrix allows users to sort through results by keywords. Looking for a house with a pool? Or off-street parking? Or even a nuclear bunker? Thats a nice touch, but it's reliant on us, the estate agent getting everything in our blurb right. Which I know aint gonna happen, most agents wont wake up to the obvious power of this newcomer until they are scratching their heads and wondering why they've been left behind. Thats why smart independent agents like us, 1stavenue.co.uk, are racing into the lead and recommeded over and over again by our landlords.

We will be doing Gloxbrix friendly write ups to make sure you can find what you're looking for when you ask for it. Thats us, I cant account for the other thousand or so agents in my area! Happy hunting!