Home repossessions jump as households ‘remain under pressure’ from higher rates

The number of homeowner-mortgaged properties being repossessed jumped by more than a third in the first quarter of this year compared with the previous three months, according to figures from a trade association.

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.

UK Finance, which released the figures, said that home repossession numbers remain very low compared with longer-term norms.

It said that, while the percentage of mortgaged properties being repossessed has increased, this is largely due to older arrears cases working their way through the court system. Proceedings were previously paused during the coronavirus pandemic.

Some 600 buy-to-let mortgaged properties were repossessed in the first quarter of 2024, marking a rise of a fifth (20%) compared with the previous quarter and 40% higher than the same period a year earlier.

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 said 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 outstanding balance in the first quarter of 2024, 3% higher than in the previous quarter.

Within the total, 32,470 mortgages were in arrears in the most severe arrears bracket, representing over 10% of the balance. This was 6% higher than the previous quarter.

There were 13,570 buy-to-let mortgages in arrears of 2.5% or more of the outstanding balance in the first quarter of 2024, a figure which was unchanged from the previous quarter.

Lenders will always seek to ensure customers remain in their homes and repossession is only ever a last resort after other options have been explored with the customer, UK Finance said.

Lenders “stress test” mortgages to help ensure borrowers can continue to keep up with their mortgage payments, even if their interest rate rises.

UK Finance encouraged anyone worried about their mortgage payments to reach out to their lender at the earliest opportunity to discuss their options.

Many lenders have signed up to a mortgage charter, which offers various options for struggling borrowers. The most suitable options will depend on individual circumstances.

UK Finance added that contacting a lender to find out what support is available will not impact someone’s credit score.