Property owners in Republic less likely to lose possession than in North
Owners of properties in Northern Ireland who fell into mortgage arrears in recent years were much more likely to face orders for possession from courts there than those in similar situations in the Republic.
According to figures obtained by Belfast investigative website the Detail, under the Freedom of Information Act, 6,337 final possession orders were granted by courts in Northern Ireland from 2008-2011.
Figures supplied by the Courts Service show 2,327 orders for possession were granted in the High Court and Circuit Court in the Republic during the same period. This is despite the difference in population and the extent of mortgage arrears in the Republic.
A spokesperson for the Courts Service says data on possession orders in the Republic may not reflect the full picture as “most mortgage contracts permit the lender to foreclose for non-payment of instalment without a court order”.
Looking further back, over the past eight years 10,000 property owners in Northern Ireland were ordered by a court to deliver possession of their property. Some 3,000 of these cases resulted in forced evictions following a failure to abide by the original court judgment.
In 2005, 837 possession orders were granted in the North, rising to almost 1,900 cases in 2010 and 1,753 in 2011.
Goodbody economist Juliet Tennent says the figures give an insight into the attitude of the Republic’s banking system, which has “been one of forbearance”. “What you’re seeing with these figures are the banks in the Republic implementing a number of policies that don’t actually progress or resolve a case that is in arrears.”
She suggested that many of the Republic’s banks “thought the economic climate and property market would improve and they wouldn’t actually have to take action, but clearly this crisis has lasted much longer than many have expected”.
Tennant says a legal anomaly in the 2009 Land and Conveyancing Act which led to some repossession cases being halted by the High Court since 2011 had now been addressed.
As well as that, the personal insolvency legislation will give banks “an opportunity to tackle the mortgage problem in a more comprehensive way”.
Writing off “unsustainable mortgages” would be key to that process, she adds.
Professor of housing at the University of Ulster Paddy Gray says he is surprised by the “stark” difference of repossession rates North and South. “It is clear that with the mortgage market in the South, there’s a lot more sensitivity, particularly with the Government.”
Gray, who also sits on the board of the housing charity Threshold, says that as a result of the “massive collapse” in the Republic, “there are many properties lying empty . . . so in a way banks don’t want to repossess and sell because they are not going to get anywhere near the original value of the property.
“So they’re entering into agreements with advice agencies like us, to sustain people living in their home and working out different rates of repayments.”
Dermot Connolly of the Defend Our Home League, set up to help people resist repossession, believes personal insolvency legislation which was passed last month “will essentially force the banks to make sustainable arrangements, in effect to write down mortgages in some cases. However, when this comes through, you could see a massive amount of repossessions or people declaring themselves insolvent.”
Earlier this year, the governor of the Central Bank said that while public policy should aim to avoid the repossession of family homes “where this is unnecessary”, when it comes to investment properties, “there are many circumstances in which there is less reason to be inhibited about repossessing”.
He said it was “surely now past time for the banks to be dealing more proactively with the situation of over-indebted buy-to-let borrowers no longer able to service the debts they assumed in order to take investment positions – now loss-making – in property”.
For more information and analysis see thedetail.tv