Low unemployment and tighter affordability and forbearance rules could slow rise in repossession activity.
- The Ministry of Justice (MoJ) has today published figures for mortgage and landlord possession statistics for October to December 2022.
- Data from the MoJ revealed mortgage possession claims increased by 23% in Q4 last year compared to the same quarter in 2021 from 2,570 to 3,160, while repossessions by county court bailiffs increased by 123 from a lower base (313 to 733).
Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: The increase in mortgage possession actions and repossessions is skewed by the City watchdog-ordered cessation of repossession activity at the start of the Covid pandemic and the roll-out of payment holidays on a grand scale for those who needed them.
“History has shown that repossession can rise steeply during periods of economic stress. Such was the case in the wake of global financial crash. Today, an uptick in mortgage rates to levels not seen since the credit crunch, workers’ incomes failing to keep up with spiralling household costs and a stuttering economy leave workers struggling to keep up with repayment obligations in a precarious position. Something like a sudden illness or job loss could leave them homeless.
“The property repossession figures also don’t make for happy reading for landlords, who are aware that their tenants’ circumstances can change overnight.
“But repossession activity might not rise as far this time because of the current low level of unemployment and tighter lending regulation, particularly around affordability and forbearance.
“The first port of call to prevent the repossession of your home is to speak to your lender and come to an agreement where you can continue payments instead of repossessing your home.”
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