Repossessions rise for the first time since 2014
Homeowner repossessions have risen quarter-on-quarter for the first time in more than three years, industry data shows.
Overall, the number of repossessions increased by more than 5% in the third quarter of 2017, compared to the three months prior, according to trade body UK Finance (UKFI).
Buy-to-let repossessions fell over the period, but this was on balance cancelled out by the increase in owner-occupied properties taken over by lenders.
The number of possessions overall remains at historically low levels.
However, it’s feared the recent interest rate rise and further hikes in the coming year could push the number even higher.
Mortgage arrears increased among those who owe 10% or more of the outstanding balance, the UKFI data showed, but fell across all bands in the three months to the end of September.
There was also a 2% increase in the number of buy-to-let mortgages in arrears, but overall the number of loans in arrears is at record lows.
Repossessions on the rise
Jonathan Harris, director of mortgage broker Anderson Harris, said: “Worryingly, repossessions are on the rise, albeit from an historically low level.
“These numbers do not reflect the recent interest rate hike either and with more rate rises a possibility, home repossessions may well increase further. We suspect that when it comes to their finances there are many people who don’t have a buffer to tide them over should they get into difficulty.
“It is also vital that borrowers keep their lender in the loop if they are struggling to pay their mortgage. 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.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, added: “Looking forward, upward pressure on interest rates is likely to increase arrears as borrowers ‘on the margins’ always tend to be most vulnerable.”