MORTGAGE arrears, repossessions, and unemployment are soaring, leaving many families facing a grim Christmas. Yet from next Monday millions will enjoy a sharp reduction in their monthly mortgage bills, while sales ring out seasonal cheer up and down the high street.
As we wait for more giveaways from Chancellor Alistair Darling when he delivers a tax-cutting Pre-Budget Report aimed at stimulating the economy tomorrow, Scotland on Sunday asks, just how bad is it?
The numbers of families who lost their homes
has risen by 12% to 11,300 over the past three months, according to the Council of Mortgage Lenders.
More worryingly, the rate at which debts are rolling up is breathtaking. There are now 93,700 borrowers who are between three and six months behind in their payments. A further 54,100 are six to 12 months behind, and 20,200 more than a year in arrears.
The last group is on track to be repossessed over the next few weeks and months. But rapidly following in their footsteps are the nearly 150,000 who badly need help to stave off an explosion in repossessions to even higher levels than the tragic numbers of the last property slump of the 1990s.
For some, the Bank of England is riding to the rescue, and millions will see their mortgage bills tumble in a week's time, bringing some relief.
Yet half of UK mortgage lenders have yet to announce rate reductions, which should slice up to 30% off mortgage repayments from December 1.
Big names yet to announce reductions include Standard Life Bank, the Woolwich, Skipton and Co-op. Whereas the Nationwide, which has cut, is now charging 4.69%, and Scottish Widows Bank 4.99%, Standard Life borrowers are paying 6.59%, with customers at the Woolwich on 6.64%, the Co-op on 6.49% and the Skipton on 6.45%.
So the picture is mixed. Come next Monday, some borrowers will be celebrating a significant easing of the pain. Nationwide customers, for example, with £100,000 repayment mortgage, will have an extra £107.91 monthly, compared with October, since when their monthly bill has fallen from £674.58 to £566.67.
Wickedly, for others, there is no end of mortgage misery in sight. For this reason, calls are growing for the Government to force rogue lenders into rate reductions, and there is some expectation that Darling could announce new measures to force or shame them into rate cuts in tomorrow's announcements.
By refusing to cut, they are rendering impotent the Bank of England's attempts to kick start the economy by shock interest rate reductions, and wrecking the strategy for recovery.
The final most worrying aspect of rising repossessions is that this is taking place before the scalding iron of massive redundancy programmes has begun to burn.
If job losses top three million as many now anticipate, unemployment will replace financial constraints as the major cause of repossessions, which could well climb to levels we hoped never to see again.
Capital Economics is one body which expects repossessions to exceed the 1,500 weekly we saw in much of the UK at the height of the last property slump. Economist Ed Stansfield said: "With the news about the wider economy deteriorating almost daily, it is hard not to conclude that a significant further rise in mortgage arrears and repossessions lies ahead. Indeed, if the economy faces as deep a recession as we expect, there are good grounds to expect mortgage arrears to match, or even exceed, their early 1990s highs."
Yet much has changed since the last housing slump. Many mechanisms now exist which were unheard of then, such as mortgage to rent schemes, which can help families stay in their homes.
Furthermore, lenders do now try to bend over backwards to avoid taking a property into possession, having learned during the last property crash that everybody loses when a family is kicked out onto the streets.
