Rise in the number of repossessed homes

image of house keysUK Finance, the body that represents major UK banks, has reported a 17% rise in homeowner mortgaged properties taken into possession in the last quarter of 2019. 

Mortgaged property usually only becomes a  repossessed home or property as a last resort, once lenders believe there is no likelihood of the borrower being able to make repayments.

Homeowner Mortgages

The statistics may sound drastic, but in actual terms, 17% equates to only 59 properties repossessed for every 100,000 homeowner mortgages, or 1,330 properties in total.

The proportion of homeowners in mortgage arrears is at historically low levels, with 70,880 homeowners (0.78%) in arrears of 2.5% or more of the outstanding mortgage balance over the quarter. 21,770 homeowners were in arrears of 10% or more.

However, both figures were lower than the the previous year when repossessions in Q4 2018 were 9% higher.

Buy to let properties

Over the same period, there was a 20% rise in buy-to-let repossessions, and the actual number of buy-to-let mortgaged properties repossessed in Q4 2019 was 660 properties.

Again, this sounds more dramatic than it actually is. There were 137 repossessed properties per 100,000 buy to let mortgaged properties. Only 4,390 buy to let mortgages were in arrears of 2.5% or more, making the number of properties with an outstanding mortgage just 0.22% of all buy to let mortgages.  Of these, 1,160 buy to let mortgages were in arrears of over 10%: 3% fewer than Q4 2018.

Historically fewer repossessions than 2009-2014

Both residential and buy to let mortgage repossessions are significantly fewer than they were after the financial crisis, between 2009-2014.

In 2009, approximately 12,000 property repossessions took place, reducing to around 5,000 by 2014. By 2016, the number of repossessions fell significantly and it is thought that the recent rise is largely due to historic arrears being processed because of recent regulatory requirements.

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