Home repossessions surge in second quarter of 2019

The number of home-owners’ properties being repossessed jumped by 15% year on year in the second quarter of 2019, figures from a trade association show.

There were 1,270 such repossessions of mortgaged properties in April to June 2019 – 15% more than the 1,100 in the same period in 2018, UK Finance said.

The latest figure is lower than the 1,390 repossessions in the first quarter of 2019.

The upswing in people losing their homes has happened despite continued low mortgage rates generally.

UK Finance said the recent increase in repossessions has been partly driven by a backlog of older cases being processed in line with the latest regulatory requirements.

It said repossessions across the UK remain “well below” the levels seen between 2009 and 2014, and continued: “Lenders continue to show flexibility to borrowers in financial difficulty and possession is always a last resort.”

UK Finance’s figures also show the number of home-owners in arrears with their mortgage remains at historically low levels.

There were 75,890 home-owner mortgages (representing 0.84% of all residential mortgages outstanding) in arrears of 2.5% or more of the outstanding balance in the second quarter of 2019.

This was a 3% decrease compared with the same period in 2018.

The proportion of homeowner mortgages in arrears remains at historically low levels, with the vast majority of borrowers continuing to repay their mortgages in full and on time each month, today's arrears and possessions update reveals: https://t.co/NvsAzb6BuD pic.twitter.com/SpWRjXJnlD

— UK Finance (@UKFtweets) August 8, 2019

Within the total, there were 23,370 home-owner mortgages with more significant arrears representing 10% or more of the outstanding balance on their mortgage. This was 2% lower than in the same quarter of 2018.

The number of landlords in arrears with buy-to-let mortgages increased year on year.

There were 4,660 buy-to-let mortgages (0.24% of all buy-to-let mortgages outstanding) in arrears of 2.5% or more of the outstanding balance in April to June 2019, 5% more than in the same period in the previous year.

Within the total, there were 1,200 buy-to-let mortgages with more significant arrears representing 10% or more of the outstanding balance on the mortgage. This was 12% higher than in the same quarter of the previous year.

UK Finance said: “Although there have been some increases in buy-to-let arrears, these are small and from a low base.”

And 590 buy-to-let mortgaged properties were repossessed in the second quarter of 2019, 2% more than the same quarter of the previous year.

Jonathan Harris, director of mortgage broker Anderson Harris, said borrowers should plan ahead and consider how they would cope if interest rates increased.

“Long-term fixed-rate mortgages continue to be popular as they are competitively priced and enable borrowers to gain certainty and help with budgeting,” he said.

“Repossession is devastating and any borrowers struggling to repay their mortgage should keep their lender in the loop.

“Lenders are being flexible and showing forbearance but it is much easier and less stressful to come up with solutions early on than further down the line when options may be much more limited.”