Mortgage Boycott

Could Chinese Mortgage Boycott Happen In The UK?

In a growing Grassroots revolt, tens of thousands of Chinese have stopped paying their mortgages. Could something similar happen here in the UK?

What's going on with Chinese Mortgage Holders?

Not surprisingly, getting news out of China isn't the easiest. But from what we can tell, at first, around 1000 people stopped paying their mortgages, and then as word got out on Social Media, thousands more have since joined them. The movement appears to be getting bigger and bigger. As of the 25th of July 2022, the number of people refusing to pay their mortgage in China stands at 950,000 people.

The problem in China is that people feel they were mis-sold their properties, mis-sold their mortgages and were lied to by institutions. They are angry.

Chinese Government's Reaction

Most commentators in the West expect China to crush the dissent and march the boycotters/non-paying mortgage holders off to some re-education camp. These views seemed to be confirmed when one video clip of Chinese tanks on the street outside a bank went viral. As far as we can tell, these tanks had nothing to do with a banking crisis. The tanks are on the streets of a faraway Chinese Province with no reported banking issues. The footage genuinely appears to be some strange ill-timed military exercise. So we have to be careful in what we report.

As far as we can tell, nobody is being marched off to prison - just yet. Instead, the Chinese Government has set up funds to help bail out mortgage holders.

Is The Chinese Government going soft?

It's hard to tell, but in a way, it doesn't really matter. This article's point is to ask: What would happen in the UK if people stopped paying their mortgage payments?

The question "What would happen?" may become important in the next 2-3 years. The cost of living crisis is exploding, and mortgage interest rates could go above 10% to fight inflation. People in this country could band together and say they aren't paying.

hat would be the UK's Government's response

Each year around 8,000 people lose their properties due to non-payment of mortgages. In addition to that 8,000, around 75,000-100,000 are in arrears to some degree.

The numbers of mortgage boycotters would have to be in the region of an additional 50,000 - 75,000 to become a real headache for banks. It's not that many when you consider how many it took to cause the Chinese Government to act. It could genuinely happen, especially when people have nothing left to lose.

As far as we could tell, the banks and Government would have 3 options.

1) Go quickly out of the blocks and try to crush the protestors by immediately fast-tracking repossession hearings. This risks clogging up the Courts, garnering sympathy for the boycotters and others joining in.
2) Ignore the protests and try to starve the movement of the oxygen of publicity. Difficulties with this option are that the media are almost a political movement of their own. They would most likely have this as their top story each night.
3) Negotiate with the protestors. Just like in China, they would announce the setting up of a special fund to help mortgage holders. More free money from the taxpayer would kick the can down the road and increase inflation.

Which option would a UK Government choose?

One thing we know from the last 15 years is, Governments will kick the can down the road for as long as they can rather than solve the issue through short-term pain. Most of the problems we are facing now are due to the Government delaying tough decisions.

The Chinese mortgage boycott is one to watch. In our opinion, it is 50/50 that something similar could take off here, especially if the Chinese Government gives in.

To answer the question in this article. Yes it could happen here, but it probably won't because the Government will make tax payer funded concessions before it gets into a full swing. Just like it bought off certain people with a £326 tax payer gift last week.