The Central Bank of Ireland has this morning released statistics on mortgage arrears and repossessions for the three months ending 31st December 2012 – the main press release is here which has links to tables etc. An extra 3,000 are now in arrears of more than 90 days compared with Q3,2012 and such accounts in arrears are up by a very worrying 25,000 in the past 12 months. In October, 2011 President Clinton – pictured above at the Global Irish Network in October 2011 – described the mortgage crisis as the single biggest economic issue facing this State. At that time, there were “just” 62,970 mortgage accounts in arrears of over 90 days, today, such accounts stand at 94,488, a 50% increase. The mortgage crisis has become a lot more crisisier.
The Central Bank has yet again said the “introduction of a new collection system in recent months has resulted in some changes to previous quarters’ data” Given the stonking big error that the Central Bank made in 2011 in counting bondholders, I wonder how much of the changes are really due to “a new collection” system and not just good old-fashioned cock-ups by the folks on Dame Street whose serried ranks always seem to have their well-fed heads stuck in the sports section of newspapers whenever visited. I see that the Central Bank also managed to leak the statistics yesterday, ahead of their formal publication this morning.
Anyway, here is the summary which goes back to Q3,2009 when the statistics were first collected – I have checked Q3,2012 and Q2, 2012 to ensure it matches current Central Bank data, but previous quarters reflect the data as presented AT THAT TIME by the Central Bank. (click to ENLARGE)
Overall at the end of Q4,2012 there were 143,851 mortgage accounts in arrears including 49,363 in arrears of less than 90 days. In addition there were 43,021 restructured accounts NOT in arrears but mostly just paying interest. Recent figures from social protection minister, Joan Burton revealed that in 2012, there were 14,127 households in receipt of mortgage interest supplement payments. These are all what are termed principal dwelling mortgages, pr owner occupier and at worst, you could say that 1 in 4 mortgages is in some sort of obvious distress.
The above figures exclude buy-to-let mortgage accounts where the statistics released this morning show that 19% or 28,000 out of 140,000-odd BTL mortgages were in arrears of more than 90 days. In other words, that sector is in even worse condition.
The only less dark spot is the pace of increase in arrears is slowing, but with property prices still declining, unemployment still elevated, cuts to disposable income and interest rate rises looming, we are far from out of the woods in terms of new problems. And regardless , that still leaves the current problem.
Repossessions in Ireland remain teensy by international standards with just 134 repossessions in the Q4,2012 and 604 in the past year. The so-called Dunne case which prevents repossession in pre-2009 mortgages might be cited as a factor but in truth, our draconian bankruptcy laws and forebearance by banks are the primary factors. Repossessions will rise under the new Personal Insolvency Act 2012 – when it is finally commenced – but at present you are 27 times more likely to have your home repossessed in the UK than in Ireland, if you fall into arrears.