Frightening depth revealed in mortgage arrears figures

13 December 2012

For the thirteenth consecutive quarter, the Central Bank has today released figures that show yet another increase in the level of mortgage arrears that affect people's homes. Legal rights group FLAC (Free Legal Advice Centres) said the news was not unexpected but new information provided shows the depth of the arrears crisis.

Responding to the figures, FLAC Director General Noeline Blackwell said "The arrears crisis continues to be serious but is not unexpected. No durable, long-term solutions have been put in place. Lenders continue to adopt a sticking-plaster approach to the problem. The news in these figures is the frightening depth of the arrears."

FLAC Senior Policy Analyst Paul Joyce noted that the figures provide detail for the first time on the depth of arrears for different categories. Some 19,541 households have been in arrears for 2 years or more and these households have an average level of arrears of more than €40,000.

"The comments of the Minister for Justice earlier today that the Personal Insolvency Bill may assist those with unsustainable mortgage debt to have that debt written down or rescheduled must be placed in context. Creditors still retain the right to reject such proposals and there is no appeal against their effective veto," said Mr Joyce.

"It is incredible that in the fourth year of a relentless rise in the number of households in mortgage arrears, we still lack the systems we need to tackle this," concluded Ms Blackwell.




Editors' notes:
1. The figures include:

  • Mortgages in arrears for under 90 days have increased by a very significant margin of almost 10%. This may indicate that a number of previously functioning accounts have now slipped into the arrears category.
  • Accounts in arrears for over 90 days have increased by a smaller percentage of about 3.5%
  • The number of restructured accounts has decreased by about 4% but the number of such accounts that are not in arrears has increased, again by a significant amount of almost 9%. This may indicate again that a number of new customers facing the prospect of arrears for the first time may have sought restructures during the quarter
  • The total number of accounts either in arrears or restructured has increased from about 22% (168,637 accounts) at the end of the last quarter to 23.5% (179,370 accounts) at the end of this quarter, an increase of about 7%
  • Figures are included for buy-to-let mortgages for the first time. These show that almost one in four (24.5%) are in arrears and the average arrears figure is almost €26,000. Almost one in ten (9.5%) have been restructured but are not in arrears.


2. FLAC (Free Legal Advice Centres) is a human rights organisation which exists to promote equal access to justice for all. FLAC is an NGO that relies on a combination of statutory funding, contributions from the legal professions and donations from individuals and grant-making foundations to support its work. FLAC offers basic legal information through its telephone information line and free legal advice through its network of 80 volunteer evening advice centres. It also campaigns on a range of issues including personal debt, fairness in social welfare law, public interest law and civil legal aid.

3. FLAC's recent releases on personal debt law reform are available online including comments on the government's information initiative around mortgage debt and reaction to the ECB's Opinion on personal insolvency measures.