Transcript the housing perspective - over-indebtedness

Over-indebtedness
The housing perspective
Workshop: Household over-indebtedness in the EU in the
context of the crisis, the way forward
Brussels, 6 December 2011
[email protected]
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Housing bubble at the heart of current crisis
 Subprime crisis in the US
triggered the financial crisis
 Burst of housing bubble in the
US but also Ireland, Spain…
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Housing trends in the EU
Over the last two decades,
increase in:
 home ownership rates
 housing prices
 mortgage loans
European households’ distribution across tenures
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Source: OECD
Source: Eurofund, EQLS
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Mortgage indebtedness in Europe
Residential mortgage debt to GDP ratios in the EU 27
EU average:
from 32% in
1998 to 52.4%
in 2010
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Housing repossessions
 England: 65 000 homeowners facing repossession this
year, highest since 1992. About 425 000 borrowers at
least three months behind with their home loan
payments by the end of this year.
 Ireland: one-in-nine homeowners are now finding it
difficult to keep up with monthly payments and are either
officially in arrears for more than 90 days or have struck a
deal with their banks to restructure the mortgage.
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Cost of housing in Europe
 Housing-related expenditure
has increased considerably in
Europe over the last decade
and now represents the highest
share of consumer spending,
making up an average 22.9 % of
total household consumption
expenditure, up from 20.4 % in
2000.
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Rising prices of housing and energy
Nominal house prices, 1998-2010
Gas prices for European households,
2005-2011
Source: European Mortgage Federation,
HYPOSTAT (2010)
Source: EUROSTAT
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Housing costs per household type and income level
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Good practices from the social housing sector
 Avoiding housing repossessions: mortgage relief schemes
(England, Italy, Spain..)
 Promoting finance inclusion of social housing tenants and tackling
borrowing from ‘loan sharks’ (Moneyline Cymru, My Home Finance)
 Increasing financial awareness: money advice services
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… Thank you for your attention!
[email protected]
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