Mortgages rears figures are out for Q2 2013 and guess what, things are (predictably) getting worse. I am sure the Government will say that 'getting worse today'='getting better in the future'. As such, we do live in the world where stabilisation = decline in the rate of decline, while a slight uplift on any time series is greeted as an indisputable 'gathering growth momentum'.
What do the numbers of mortgages arrears tell us, spin aside? I highlight main conclusions in bold.
In Q2 2013 there were 919,139 mortgages accounts outstanding (EUR139,883 million in total), of which 770,610 accounts were for primary residences (EUR109,147 million). Primary residences are referenced as PDH accounts in CBofI. The balance of 148,529 accounts (EUR30,626 million) relate to Buy-to-lets, BTLs.
This means that over the year through the end of H1 2013, the number of mortgages accounts rose 0.4% and their outstanding volumes fell 2.41%. Deleveraging is very slow in the economy, given the crisis scope: number of primary mortgages accounts rose 0.7% and their volume shrunk 2.52%, while the number of BTLs fell 1.1% and their volume shrunk 2.01%. In fact, as the chart shows, deleveraging process so far is not helping the workout of arrears:
Total number of primary accounts in arrears of any duration is up 11.46% y/y, underlying volume of mortgages represented by these is up 9.1% to EUR25.69 billion from EUR23.55 billion a year ago, while amounts in arrears are up 36.46%, breaching EUR2 billion for the first time. This means that, penalties inclusive, the arrears are now attracting ca EUR202 million in roll up charges annually or about 40% of the annual savings that we need to deliver in Budget 2014 from the social welfare funds.
Total number of BTLs in arrears was up 15.06% y/y and the amounts of mortgages outstanding for the BTLs in arrears rose to EUR10.94 billion - up 11.45% y/y, while the actual cumulated levels of arrears hit EUR1.207 billion, up 43.63% y/y.
All in, there were 182,840 accounts in arrears, representing cumulative amount outstanding of EUR36,634 million and cumulated arrears of EUR3,231 million. These were up: +11.39% y/y for account numbers (+19,924 accounts), +EUR3.267 billion or 9.79% y/y for mortgages outstanding, and +EUR 907 million or +39.05% y/y for actual arrears.
Restructured mortgages numbers declined in Q2 2013, from 106,612 accounts to 100,920 accounts over the period of 12 months through June 2013. This breaks down as per decline of 6.57% for primary residences from 84,941 to 79,357 accounts, and a decline of just 0.5% for BTLs from 21,671 to 21,563 accounts.
Performance of restructured mortgages somewhat improved, although we do not know as to why this was the case. Restructured mortgages that were not in arrears as percentage of the total number of restructured mortgages has improved from 47.35% to 53.31% for primary mortgages, and from 51.17% to 61.13% for BTLs.
And some scarier figures for the end:
- Total number of mortgages at risk of default or defaulted (mortgages in arrears, mortgages restructured and not in arrears, and repossessions) rose to 239,834 in H1 2013 (up 11.27% y/y)
- Total number of primary mortgages at risk or defaulted rose to to 186,202 in H1 2013 (up 9.94% y/y)
- Total number of BTL mortgages at risk or defaulted rose to to 53,632 in H1 2013 (up 16.12% y/y)
- 20.26% of all primary residential mortgages were in arrears or at risk of default in Q1 2013, against 18.50% in Q2 2012.
- 36.11%of all BTL mortgages were in arrears or at risk of default in Q1 2013, against 30.75% in Q2 2012.
- 26.09% of all residential mortgages were in arrears or at risk of default in Q1 2013, against 23.55% in Q2 2012.
- By volume of mortgages outstanding, 33.35% of the total mortgages pool or EUR46,618 million were mortgages either in arrears, or restructured at the end of Q2 2013, up on 29.51% (or EUR42,258 million) at the end of Q2 2012.
``Performance of restructured mortgages somewhat improved, although we do not know as to why this was the case.´´
ReplyDeleteCan I offer a suggestion on this?
The improvement stems from a mixture of hope ( improved deals combined some media hype about improvements in the property market ) and the slightly increased risk of severe sanction (increased repossessions and talk of such among the chattering classes).
I keep shouting about it but Spain with a similar property boom/bust profile, with the Euro, with 30% of ALL loans tanking and awhopping 26% unemployment ( 50% youth )has just 4% of its mortgages in arrears. Big diferences there include lots of repossessions and variations in how mortgages are treated regarding recourse.