Repossessions are rising, although the 2005 level is still 70% below that of 1998. This shows we are nowhere near pressing the panic button but that attention must be paid to these trends.One area to examine in this regard is mortgage payment protection insurance, as perhaps the rise in repossessions could be partly linked to the low level of MPPI take-up. The low take-up of MPPI has been recognised as a problem since 1999. Since that time, many parties have recognised the importance of MPPI and measures have been put in place to raise sales to around 50% of all mortgages sold. This was too optimistic. The 2006 figure looks likely to be around 27%, leaving a staggering 73% of mortgages without cover. This must be a concern for us all. Of course, much has changed since 1999. Policies have become easier to obtain and are far more competitive. General insurance regulation has kicked in, making sales even more pressurised for time. And perhaps most damaging of all have been the banner headlines proclaiming payment protection in the unsecured lending market as bad value and virtually useless. All this has been akin to Chinese water torture for brokers. Already overburdened advisers have had to fit in another regulated product sale and they are finding it difficult to cope. Add to all this sceptical consumers who are confused and in many cases misinformed about the benefits of the cover and it’s no wonder sales are static. It adds up to an almighty headache. The tragedy is that policies are now far more flexible and better value than before. There are many more providers in the market and this competition has resulted in lower premiums. MPPI is not expensive and provides invaluable cover. The average premium is just under 5 per 100 of mortgage payment. The way forward? Less regulation, better informed consumers and a more supportive press that understands the issues would be a good start. Low MPPI sales are too important to ignore. Any takers for supporting the compulsory selling of MPPI?
There was a time when unemployment figures were pored over for trends. Then, for a long time the subject fell off our radars, but now unemployment is back on the agenda.The recent sharp rise may be a blip but what if this is the start of an upward trend?