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Home repossessions on the decline despite rising mortgage costs

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THE LASTEST market analysis from property purchasing specialist, House Buyer Bureau, reveals that since the Bank of England started raising interest rates at the end of 2021, the number of homes being repossessed by money lenders has significantly decreased, bucking the expected trend that more and more people would lose their homes as mortgage payments go up.

In December 2021, the Bank of England started increasing interest rates to try and bring stability to the nation’s economy in the wake of the pandemic, a trend that has continued into 2022 as energy prices and war in Ukraine continue to cause economic turbulence.

As a result of these increases, the number of monthly mortgage approvals in the UK since December 2021 has fallen by -19.2% as borrowing becomes more expensive and prospective homebuyers decide to postpone their ambitions until a more stable time.

But despite this, the impact on the housing market has not been entirely negative because, as Home Buyer Bureau’s research reveals, the rate increase has not yet resulted in a rise in the number of people having their homes repossessed. Instead, there has actually been a significant drop.

In the eight months preceding December 2021, there were 1,739 repossessions across England and Wales.

The latest available data shows that in the months following the rates increase, this number has fallen by -26.1% to a total 1,285 repossessions.

The biggest fall in repossessions has been reported in the East of England where a pre-rates increase total of 70 repossessions has dropped to just 19. This is a -72.9% decrease.

In the South West, 114 repossessions in the eight months before the rates increase has fallen to just 73 in the months since; a drop of -36%. And in the North West, a total of 403 repossessions has dropped by -32.5% to just 272.

The fall in repossessions has also been significant in the North East (-30.8%), South East (-28.2%), London (-25.7%), and West Midlands (-22.7%).

Meanwhile, the drop has been smaller in Yorkshire & Humber (-2%), Wales (-6.4%), and the East Midlands (-9.3%).

Managing Director of House Buyer Bureau, Chris Hodgkinson, commented:

“Interest rate increases are never welcome news for homeowners with mortgages, so it’s going to be a relief for many to see that repossessions have not become more frequent as a result.

But this sharp decrease in repossessions doesn’t necessarily mean that homeowners are having no problem with fulfilling their mortgage. Instead, a key factor will be the fact that lenders are being advised to avoid rash repossessions in the case of payment shortfalls.

They are, for example, being advised to allow homeowners to stay in possession of the property for a reasonable time to enable them to sell the property rather than have it taken away.

So, while this drop in repossessions is preferable to a rise, it doesn’t necessarily mean that people aren’t struggling with payments and we could well see a spike in repossessions over the coming months, as the patience of lenders wears thin when it comes to those unable to fulfil their repayment obligations.”

Business

The former Parsonage Inn could be turned into two homes

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A CLOSED south Pembrokeshire inn, which sparked hopes it could become the latest community pub in the county will now be turned into two homes.

Earlier this year, The Parsonage Inn, St Florence closed its doors to the public, and a public meeting – at the behest of St Florence Community Council – was held in early February with hopes it could be run as a community venture.

In the last 20 years has seen eight tenants, with the closure coming about “due to the prolonged and sustained pressures faced to both the economy though the cost-of-living crisis with less trade, along with increases in utility, food and alcohol bills, as well as increases in business rates, minimum wage increases and further legislation on waste disposal”.

Local county councillor Rhys Jordan, who supported the meeting, said there was a strong desire to see The Parsonage Inn reopen its doors, but there was a need to temper enthusiasm with realism.

However, hopes the Parsonage would become a community pub have come to no avail, as just three per cent of the funds needed were raised.

Owner Daniel Scriven, in a recently submitted application, sought to turn the pub into two homes.

Referring to the hopes The Parsonage could become a community pub, an application before Pembrokeshire planners says: “Following its closure in January 2024 a community meeting was held on February 5 in the village hall to discuss its future, during the meeting the challenges facing the hospitality industry were discussed and the community reviewed raising funds to take the Parsonage Inn into community ownership.

“Regrettably we understand following the meeting it has become evident that only three per cent fundraising of the asking price has been raised and no offer or approach to the applicant/owner has been made by the community to the owner to put forward a viable proposal, it would therefore appear unviable.

“Following its closure in January 2024, in March 2024 the final tenant along with some members of the community have opened a small community social club in the village hall during evenings on a more ad-hoc basis which would appear more reflective in scale and usage to the community it serves, alongside The [nearby] Sun Inn.”

The application has now been conditionally approved by Pembrokeshire planners.

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Business

First Cymru bus workers secure 11.6% pay increase

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UNITE, the UK’s leading union, has secured an inflation busting 11.6 per cent pay increase for bus drivers employed by First Cymru.

The 300 plus drivers operate buses in South and West Wales working from depots in Swansea, Bridgend, Ammanford, Port Talbot, Carmarthen and Haverfordwest.

The pay deal, which was hammered out through long and detailed negotiations, will see pay increase by 11.6 per cent over a six month period. In addition, there will also be improvements in overtime and weekend rates.

Unite general secretary Sharon Graham said: “This is an excellent result and demonstrates the power of having Unite in your corner to improve jobs, pay and conditions.”

Unite regional co-ordinating officer Sarah Davies said: “Unite will be looking to build on this significant pay deal in future negotiations.

“Our members at First Cymru recognise the importance of being represented by Unite and all workers looking for a better deal should join Unite and get their colleagues to join too.”

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Business

Legal challenge to £6m holiday park expansion

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A CAMPAIGN group which has launched a legal challenge against a recently-granted scheme for a £6m expansion of a south Pembrokeshire holiday park is appealing for financial support to cover its legal fees.

Back in February, Pembrokeshire planners heard a legal challenge to a granted application for works at Heritage Park, Pleasant Valley/Stepaside had been launched.

The holiday park scheme had previously been backed twice by county planners after a ‘minded to approve’ cooling-off period was invoked as it was against repeated officer recommendations to refuse.

The controversial scheme by Heritage Leisure Development (Wales) Ltd includes the installation of 48 bases for holiday lodges, a spa facility at a former pub, holiday apartments, a café and cycle hire, equestrian stables, a manège and associated office, and associated works.

It is said the scheme, next to the historic remains of the 19th century Stepaside ironworks and colliery, will create 44 jobs.

Officer grounds for refusal, based on the Local Development Plan, included the site being outside a settlement area.

Along with 245 objections to the current scheme, Stepaside & Pleasant Valley Residents’ Group (SPVRG Ltd) – formed to object to an earlier 2019 application – also raised a 38-page objection, with a long list of concerns, describing the current application as “a reincarnation of an earlier application, which first alerted the residents of Stepaside, Pleasant Valley and the surrounding villages of the applicant’s plans to implement a complex and sprawling development which would take over the whole valley”.

The 2019 application – which had been recommended for refusal – was later withdrawn.

Legal challenges have also been mounted in connection with applications on the site.

A legal challenge to try and overturn a council decision to approve three planning applications at Heritage Park was launched in 2021 by the Stepaside and Pleasant Valley Residents Group (SPVRG Ltd), which failed in early 2022.

Following that challenge failure, a question was submitted to full council last year after it was revealed the costs awarded to the council amounted to £10,000, despite the costs being higher.

Members heard that the external legal fees paid totalled £34,000 plus VAT.

In its latest legal challenge, and fundraising appeal, SPVRG Ltd has said: “Permission was granted, even though it was against the recommendation of the planning officers and despite the objections of the three community councils involved, the two local county councillors and 245 residents. It also went against the Local Development Plan.”

It added: “This has been a stark example of a majority of county councillors, first on the planning committee and then in the full council, failing to listen to those who know best – the people who live and work in the area, and their own expert officers.”

Legal fees for the first stage of a judicial review are expected to be at least £14,000, with £1,200 raised to date through SPVRG’s crowdfunding page.

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