Tuesday, June 21, 2016

Repossession orders received by the Dublin City Sheriff

Just over a year ago we looked at a presentation given to Dublin City Council on the arrears and repossessions associated with their mortgage loans.  We can now expand this a bit with data from the Dublin City Sherriff on possession orders received and then subsequently executed or withdrawn.  The data is summarised in the following table:

Repossessions Orders Dublin City Sheriff

What do we see?

1 Orders Received From

Over the past five years the Dublin City Sheriff has received 561 possession orders for residential property.  Of these 320 (57 per cent) came from Dublin City Council, 195 (35 per cent) came from banks or building socities, with a small residual classed as “Private” (most of these arise from rental situations and the Residential Tenancies Board).

2 Outcome of Orders Received

The data indicate that around 60 per cent of possession orders are executed (342 out of 544).  The remaining 40 per cent are mainly instances where the situation is settled prior to repossession (possible because the borrower and lender have entered an alternative repayment arrangement) with a small number of instances where the order is withdrawn because they have expired (possession orders usually have a 12- month shelfl life).

Dublin City Council has the lowest execution rate for orders (though does present the most orders).  Around two-thirds of orders presented by banks and building societies are executed with this rising to almost four-fifths for orders listed as “private”.

3 Orders Executed For

In the past five years DCC has had 178 possession orders executed by the Dublin City Sheriff.  This compares to 128 for banks and building societies.  Possession orders sought by DCC will be for a range of situations such as loan delinquincy, rent arrears or anti-social behaviour.  The presentation linked to above states that:

At the end of 2014, a total of 251 accounts are categorised as unsustainable with 154 being assessed for mortgage to rent and the balance of 97 being assessed for possession (there are 25 properties due for repossession in 2015, 12 of which are abandoned).

In terms of DCC repossessions, to date there have been 16 cases of voluntary surrender and 93 District Court repossessions (a total of 109 properties have therefore been taken into DCC’s possession). The vast majority of these (n=100) relate to shared ownership including ‘affordable’ shared ownership. Repossessed properties are located across the city, with the majority in Dublin 10 and Dublin 11.

To date, only TWO households entered homeless services as a result of possession. Both departed to PRS.

So we have 93 loan-related repossessions by DCC up to the end of 2014.  In the four years to the end of 2014 there were 84 repossession orders executed for for banks and building societies in Dublin City.

The presentation also showed that DCC have issued loans to around 2,600 households.  Census 2011 showed that there were 53,000 households in Dublin City who were owner-occupiers with a loan or mortgage.  This suggests that around 50,000 households have loans with bank/building socities/lenders other than DCC.

Thus the 93 repossessions by DCC represenent about 3.5 per cent of the households they have lent to while the repossessions by banks and building socities are about 0.3 per cent of the households they have lent to.  As a percentage of the number of households they have lent to, the repossession rate of DCC is ten times greater than that of banks and building societies.

DCC have around 600 households who are 12 months or more in arrears so the 93 repossessions represents 15 per cent of that figure.  We don’t have regional arrears data for banks and building societies but for the country as a whole 6.3 per cent of accounts are more than 12 months in arrears.  If this holds for mortgaged households in Dublin City then around 3,200 households in Dublin City have mortgage arrears of 12 months or more with repossessions by banks and building societies over the past five years being four per cent of that figure.  Thus as a percentage of households in arrears of more than 12 months, the repossession rate of DCC is around four times greater than that of banks and building societies.

You can look for mentions of local authority repossessions in the report issued last week by the Housing and Homelessness Committee. You won’t find any.  But you will find a recommendation for a moratorium on repossessions. Go figure.

1 comment:

  1. Hi Séamus

    A very interesting piece of analysis.

    The higher rate is due to the sub-prime nature of the original lending.

    "Shared ownership" is a complete misnomer. In fact, the buyer was taking out two mortgages - one with a lender and one with the local authority. In effect, they were borrowing at up to 10 times income.

    Even though they often got their homes at much reduced prices, it's not surprising that they have such high arrears and repossession levels.

    Given that they are "in the system" it's probably easier for them to get social housing after giving up their privately owned house.

    Brendan Burgess