Slight rise in personal insolvencies
New figures showing a small increase in individual insolvencies of 2.7% indicates people are addressing their problems sooner rather than later, and are doing everything to avoid bankruptcy.
There were also 30,513 individual insolvencies in the last quarter, a decrease of the same period in 2010, although slightly up on Q1, when the figure was 30,145.
Andy Haslam, Insolvency Practitioner at Begbies Traynor Newcastle commented on the figures: “Personal insolvency figures appear to have plateaued at around the 30,000 mark, indicating that households are now taking steps to repay borrowing due to low interest rates.”
“I will be surprised if there is any change in the next quarter, especially after the Bank of England decided to keep interest rates at 0.5% for the 29thweek in a row. Projecting forward however, if interest rates stay as they are, we could see a reverse of this trend as living costs increase.”
High numbers of people in the North East have been hit by personal insolvency, a problem which John Dance of Vertem Asset Management, has attributed to the higher than average mortgage ratios previously offered by the Northern Rock.
He said: “Post credit crunch deleveraging here has been more severe and households haven’t been able to rely on equity finance to get by, especially with dormant house prices.
“Naturally this has a knock on to the regional economy at large, which additionally has potentially suffered stifled levels of inward investment over concerns about the impact of public sector spending cuts.”