Why increasing CCJs should matter to you

Posted 11-09-2017

Mortgage arrears are at their lowest level since 1994, and mortgage possessions have never been as low since records began in 2008.

This is the result of interest rates remaining at an all-time low, meaning mortgages are more affordable than they have been for an awfully long time.

This is good news.

You’d be forgiven for thinking, that because of this, the number of County Court Judgements (CCJs) would also be at an all-time low. Yet, nothing could be further from the truth.

The number of CCJs registered against consumers has risen to the highest level in over a decade during the first six months of 2017, according to figures released by Registry Trust.

In the first two quarters of this year, 592,552 CCJs were registered against consumers in England and Wales. This figure is up 41% on the same period in 2016 and is the highest half-year figure since before the financial crisis.

Delve a little deeper into the statistics and you also discover that the average value of CCJs decreased for the ninth consecutive year, falling 18% to an historic low of £1,509.


So what’s going on?

The facts show that more CCJs are being issued for smaller amounts than ever before. Why is that? If you think about modern lifestyles, we all now have more calls on our money than we used to have say 10 or 20 years ago.

Today, we have regular payments being made for mobile phones, broadband, satellite TV, video and music streaming services…the list goes on. In days gone by, these services simply didn’t exist.

So, if consumers default on these monthly payments, service providers are quick to take action. For example, as many lenders will confirm, missed mobile phone payments are often a root cause of CCJs.

This trend of low value CCJs shows no signs of abating, which can be a real problem when it comes to getting a mortgage. A CCJ takes 6 years to be wiped from a credit record and, while it’s there, it makes it very difficult to obtain credit. It doesn’t matter that the judgment was only for a few hundred pounds; it’s still a blot on an applicant’s credit record.


But why does that matter?

Findings from BDRC Continental’s Project Mercury show that only around half of intermediaries are handling cases like these.

Brokers that become more adept at being able to place mortgage applications with adverse credit blips will be able to tap into this growing opportunity. If a borrower has an historical adverse credit record, it doesn’t mean they can’t access competitive mortgage finance. There are options available.

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