October 2012

It is pleasing to read that Ernst and Young are forecasting the UK economy will rebound in the second half of this year and grow by 1.2% next year buoyed by a housing market revival next spring.

There are "if's and but's" and much will depend on the extent to which consumers take opportunities to pay down their debts. This won't be helped by yet more price rises being passed onto them by their gas and electricity providers from November.

Focus on....Customer Interviews

Latest statistics from the financial education charity, Credit Action, show that 1,552 people a day reported that they had been made redundant between May and July 2012 and that £53,706 is the average household debt including mortgages.

The estimated average outstanding mortgage for the 11.2m households that carry mortgage debt stood at £111,793 in August.

The figures also tell us that the CAB are dealing with 8,465 new debt problems each working day, while 93 properties are repossessed each day. Staggeringly, in Q2 2012 UK banks and building societies wrote-off £1.15 billion (of which £567 million was credit card debt) amounting to a daily write-off of £12.52m. Click here for the full report into the UK Debt Statistics

Here at London House we interview many individuals on a daily basis on behalf of our clients in an effort to get their up to date financial position. Wherever possible we meet them at home and complete a detailed income/expenditure/assests/liabilities breakdown. If our client has asked us, we will also negotiate a repayment programme on their behalf within agreed parameters. 

Wherever You Go

We were asked by one of our overseas clients to visit a debtor to interview them about their finances and to get a closer feel for their asset base. The subjects owed a large amount of money to a financier abroad and our client wanted the debt transferred and registered in the UK to allow them to obtain judgment and proceed with enforcement.

When they had originally borrowed the money they provided a schedule of their assets both in New Zealand (where they resided at the time) and in the UK. When the borrowing went into default they fled back to the UK. We tracked them down and met with them. Whilst not particularly pleased to see us they saw the error of their ways and co-operated with us. We were able to establish that they did indeed have a good asset base and were also in full time, well paid, employment. The liabilities they had were comfortably manageable.

Armed with this information, our client began enforcement procedures and ultimately a repayment programme agreed via the sale of property assets.

London House News

As mentioned last month we have exhibited at the NEC twice in October.

 Firstly, we were at the National Franchise Exhibition on 5th & 6th. This was our first time at this event and we feel it went very well. We received a good number of enquiries from potential new Franchise Owners and we are hopeful that some will progress to them becoming part of our network. Indeed, follow up interviews are already being held at Head Office. 

We were then back at the venue on the 9th and 10th for the Solicitors Group exhibition, Law Autumn NEC. Again, a new event for us but a good opportunity for us to meet both existing and potential new clients. We were helped over the two days by Allan Fern, our Franchise Owner for Dudley and Birmingham, thank you Allan, and we now have a number of enquiries to follow up.

Finally, it will soon be time for our own Franchise Owners' Conference (how quickly it comes around!). This year it is being held on 7th November and will be at the National Badminton Centre in Milton Keynes. There will be a large turn out from our network and it is shaping up to be our best conference yet. More details next month.  

You asked us

"The Credit Action Debt Statistics were published on 3rd October. Any thoughts?" 

I have touched on these figures above. Whilst there are some encouraging signs, such as the total amount of credit card debt continues to fall and outstanding unsecured consumer credit was down £9bn at £156bn on the previous year, there are still causes for concern. 

Every 15 min 30 sec a property is repossessed and every 4 min 49 sec someone will be declared insolvent or bankrupt. 904,000 people had been unemployed for over a year between May and July 2012 and total outstanding personal debt stood at £1.412 trillion at the end of August which is up from £1.407 trillion last year. These are depressing figures. 

Clearly as a country we have some way to go to get out of this gloom and reach growth as suggested by Ernst and Young. There are still some tough times ahead.