Some 870 homeowner-mortgaged properties were repossessed in the first quarter of 2024, 36% higher than in the previous quarter and 9% higher than the same period a year earlier, according to UK Finance
The number of homes repossessed by banks has soared as families are squeezed by the cost of living crisis and high interest rates.
Figures from industry body UK Finance reveal that repossessions of homeowner-mortgaged properties have increased by 36% in the first quarter of 2024 compared to the last three months of the previous year. In the first three months of the year, 870 homes were taken back, which is also a 9% increase from the same time in 2023.
UK Finance insists that repossession figures are still relatively low when looking at the bigger historical picture. The association points out that the rise in repossessions is mainly due to the backlog of older arrears cases now being processed by courts after a pause during the Covid-19 pandemic.
Landlords haven’t been spared either, with 600 buy-to-let properties repossessed in the first quarter of 2024 up 20% from the previous quarter and a 40% year-on-year increase. Charles Roe, director of mortgages at UK Finance, said: “The number of mortgages in arrears, while still low, continues to rise as households remain under pressure from the cost of living and higher interest rates.”
“Lenders offer a range of support to anyone worried about their finances, with teams of trained experts ready to help. If you are struggling, please reach out to your lender as soon as possible to discuss the support options available.” UK Finance announced that mortgages in arrears accounted for 1.11% of all homeowner mortgages outstanding and 0.69% of all buy-to-let mortgages outstanding in the first quarter of 2024.
There were 96,580 homeowner mortgages in arrears of 2.5% or more of the remaining balance in the first quarter of 2024, a 3% increase from the previous quarter. Out of this total, 32,470 mortgages were in serious arrears, representing over 10% of the balance – an increase of 6% from the preceding quarter.
The number of buy-to-let mortgages in arrears of 2.5% or more of the outstanding balance stood at 13,570 during the same period, a figure which did not change from the previous quarter. UK Finance emphasised that lenders always attempt to ensure customers keep their homes, turning repossession into a last resort after discussing other potential solutions.
It also pointed out that lenders “stress test” mortgages to ensure borrowers can continue to afford their mortgage payments even if interest rates rise. UK Finance urged anyone concerned about their mortgage payments to get in touch with their lender to discuss their options as soon as possible.
Numerous lenders have committed to a mortgage charter, providing a range of options for borrowers facing difficulties. The most appropriate solutions will be dependent on personal circumstances. UK Finance further stated that reaching out to a lender to explore available support will not affect an individual’s credit score.
