Homelessness among former home-owners set to ‘escalate’

Conference hears sacrifices people are making to meet mortgage repayments

A conference in Dublin heard how people were sacrificing quality of life to meet mortgage obligations, with homeowners selling belongings, cars and furniture, or going without food to ensure they kept up repayments.

A conference in Dublin heard how people were sacrificing quality of life to meet mortgage obligations, with homeowners selling belongings, cars and furniture, or going without food to ensure they kept up repayments.

Thu, May 8, 2014, 20:25

The next “big wave” of homelessness is likely to come among former home-owners as repossessions “escalate” from this summer onwards, a conference in Dublin heard today.

The Conference of Irish Geographers in UCD also heard about the levels of “pauperisation” which households were suffering, privately, in order to meet mortgage payments.

Dr Declan Redmond of the UCD school of geography said that almost a quarter of a million mortgages were in some kind of distress. According to the latest data from the Central Bank, 240,731 mortgages were either in arrears or had been restructured, he said.

Some 136,564 mortgages on principle private dwellings were in arrears and 45,637 had been restructured. Of the buy-to-let mortgages, 39,250 were in arrears and 13,070 had been re-structured while 6,210 of local authority mortgages were in arrears.

“When you look at the level of stress and arrears it is actually phenomenal,” said Dr Redmond.

He said the numbers in arrears for more than two years was now almost 25 per cent of the total in arrears. This proportion was growing “and that’s where you are going to have real, real problems,” he said.

The average amount these households were in arrears by was over €40,000, he added.

While a Central Bank code of conduct had imposed repossession moratoriums, which had stalled the rate of repossession, this code had “become more bank-friendly and less household friendly”, he said. The troika had also demanded that the rate of repossession speed up.

“I suspect this is the start of the beginning of the crisis. Repossessions are going to escalate. It’s very difficult to put a figure on that but...there are something like 31,000 of the arrears cases in the legal system.”

Dr Dáithí Downey, of Trinity College Dublin, presented unpublished research on how people were sacrificing quality of life to meet mortgage obligations.

He found people had sold belongings, cars and furniture. Other householders told him they would go without food to ensure they kept up mortgage repayments, while a mother told him of “counting the pennies” in Tesco “trying to get the kids a treat so that they don’t go into school and say we’re poor”.

“People are doing everything they can to keep that [MORTGAGE]debt under control,” said Dr Downey.

“It’s very challenging for people and there’s a lot about presentation, saving face and saying you’re coping where privately people will tell you something very different.”

Drawing on EU data, he said that while in 2007 some 18 per cent of householders said meeting mortgage repayments was a “heavy burden”, this had grown to 37 per cent by 2012.

“It can be seen that a combination of Irish householders’ over-indebtedness, falling net disposable incomes and growing unemployment, together with higher borrowing costs means that overall housing costs are increasingly perceived as burdensome.”

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