Is mortgage arrears tsunami warning likely to be wrong?

Cantillon: House repossessions trigger fear and misery but Ireland seldom does them

David Hall, chief executive of the Irish Mortgage Holders Organisation: speaks of “incontrovertible proof that thousands upon thousands of Irish families may lose their homes”.   Photograph: Nick Bradshaw

David Hall, chief executive of the Irish Mortgage Holders Organisation: speaks of “incontrovertible proof that thousands upon thousands of Irish families may lose their homes”. Photograph: Nick Bradshaw

 

Research from the Central Bank of Ireland detailing the elevated level of long-term mortgage arrears – a hangover from the 2008 crash – was seized upon on Monday by David Hall, chief executive of the Irish Mortgage Holders’ Organisation, as “incontrovertible proof that thousands upon thousands of Irish families may lose their homes”.

He has warned of a tsunami of future evictions. The thing is, we’ve been continually warned about it in the past, without it ever coming to pass. We’ve had fewer repossessions than countries that didn’t even have a property crash.

In the 11 years since 2009, about 9,500 homes have been repossessed here, roughly a third by court order and the rest by voluntary surrender. Given the scale of Ireland’s crash in 2008, that’s a pretty small figure.

Personal tragedy

To put it in context, there were more than 120,000 mortgages in arrears in 2013 at the height of the crisis. Since then, it has fallen to 57,000 with lenders seeking better solutions and the economy picking up.

This is not play down the tragedy of repossession for the households involved, just that it hasn’t happened on the scale many predicted. Ireland doesn’t have a repossession culture. And the proof of this is that banks have opted to sell off their non-performing loans rather than go down the legal route of trying to repossess the underlying asset, a process that presents a different set of challenges.

Lost homes

“Banks, vulture funds, the government and the Central Bank have bluffed for eight years trying to tell us that there will be no tsunami of repossessions,” Hall said. “Since the recession, 9,500 families lost their homes. Many view this to have been a tsunami.”

Of the 41,061 accounts in arrears of more than 90 days, 64 per cent are in arrears for more than two years, up from 54 per cent in 2015, the Central Bank said.

It also found that one-third of those in long-term arrears were making no mortgage repayment while almost half had limited or no engagement with their lender. This is still a problem area, no doubt, and it’s likely to be made worse by the Covid crisis. Hall might yet be proved right.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
GO BACK
Error Image
The account details entered are not currently associated with an Irish Times subscription. Please subscribe to sign in to comment.
Comment Sign In

Forgot password?
The Irish Times Logo
Thank you
You should receive instructions for resetting your password. When you have reset your password, you can Sign In.
The Irish Times Logo
Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.
Screen Name Selection

Hello

Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
Forgot Password
Please enter your email address so we can send you a link to reset your password.

Sign In

Your Comments
We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Standards. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or by filling out this form. New comments are only accepted for 3 days from the date of publication.