Home repossessions jump 15 per cent in third quarter of 2022

Around 700 homeowner-mortgaged properties were repossessed from July to September 2022 (Daniel Lynch)

The number of homes being repossessed jumped in the third quarter of this year, according to figures from a trade association.

Some 700 homeowner-mortgaged properties were repossessed in the third quarter of 2022, which was 15 per cent higher than in the previous quarter, UK Finance said.

Meanwhile, a total of 390 buy-to-let-mortgaged properties were repossessed in the same period, which was up by 11 per cent compared with the previous quarter.

Mortgage rates have climbed as the Bank of England base rate has risen in recent months. There was also a jump in mortgage rates amid the market turmoil which followed the mini-budget earlier this autumn.

Last week, the Treasury Committee heard evidence suggesting the buy-to-let sector could be particularly hard hit by rising mortgage rates.

Ray Boulger, senior mortgage technical manager at broker John Charcol, told the committee last week: “I think the buy-to-let market is where we’re likely to see a lot more stress than the residential market.”

Property agents Savills recently predicted that UK house prices could fall by about 10 per cent next year before starting to recover in 2024.

First-time buyers and buy-to-let investors will bear the brunt of increased affordability issues next year, adding to pressures on rental prices, according to predictions by Savills.

UK Finance’s figures also showed that 74,440 homeowner mortgages were in arrears of 2.5 per cent or more of the outstanding balance in the third quarter of 2022, which was one per cent fewer than in the previous quarter.

Within the total, there were 28,910 homeowner mortgages with more significant arrears, of 10 per cent or more of the outstanding balance.

This was broadly unchanged from the previous quarter when the figure was 29,030.

Meanwhile, 5,760 buy-to-let mortgages were in arrears of 2.5 per cent or more of the outstanding balance in the third quarter of 2022, which was two per cent more than in the previous quarter.

Within the buy-to-let mortgages arrears total, there were 1,780 loans with more significant arrears, representing 10 per cent or more of the outstanding balance. This was one per cent fewer than in the previous quarter.