North feels the repossession pinch

Sam Cordon

November 1, 2013

Court-ordered repossessions in the year to Q2 2013, broken down by post code, show there were 3.2 repossessions per 1,000 households in the North, a third more than the South with 2.4 repossessions.

In the year to Q2 2007 there were 14% more repossessions in the North than in the South, a figure which has been steadily rising.

But overall repossessions fell 17% in the year to July with 66,544 repossession orders in 2012 to 2013 as opposed to 77,856 in 2011 to 2012. The average rate of orders per 1000 households fell from 3.3 to 2.8.

Richard Sexton, director of e.surv chartered surveyors, said: “On a national level, repossessions are falling, as the economy slowly crawls back to health. Mortgages are becoming cheaper, wages are slowly picking up and the labour market is showing more vitality.

“But the recovery has been more pronounced in the South driven forward by booming property and labour markets in the capital and home-counties.

“This has been slow to filter through to the North, where staggeringly, seven out of 10 Northern towns are repossession hot-spots.”

In areas such as Yorkshire and the North West wages are recovering more slowly and fewer jobs on offer.

As a region the North has traditionally depended on public sector jobs but a squeeze in public sector funding has led to loss of jobs for many and very slow pay increases for others.

Pay increases that are consistently below the rate of inflation have further tightened household budgets and caused many to fall behind on mortgage repayments.

The North West has shown the greatest rise in unemployment in the UK with 9% of the working population out of work according to the Office of National Statistics, a 0.8% rise over the last quarter.

Similarly the North East and Yorkshire also have some of the highest levels of unemployment, with 10% and 9% of the working population idle in these regions.

Repossessions by postcode area

North-West towns suffered the most from court repossessions in the year to July 2013 with four of the worst five towns for repossessions in this region.

In Chester, the town with the highest rate of repossessions in the UK, there were 8.4 repossessions per 1,000 households in the year to July 2013 – three times the UK average of 2.8 repossessions.

Blackpool, Oldham and Wigan were also among the five worst UK towns for repossessions with 4.5, 4.3 and 4.2 repossessions per 1,000 households respectively.

Repossessions by region

Although the South West and the South East have below average rates of repossessions they show some of the biggest annual increase in repossession rates.

Taunton, Torquay and Plymouth all experienced a rise in repossessions in the year to July with repossessions increasing by 34%, 30% and 28% respectively.

In the South East, Brighton and Reading experienced repossession rises of 30% and 27%. But the town in which repossessions increased the most over the past year was Carlisle where the rate of repossessions grew 37%.

London not out of the woods

Despite being below the UK average London shows a big disparity in repossessions. East Central London (0.7), West Central London (1.2), and West London (1.4) had the second, third and fourth lowest repossession rates outpaced only by Galashiels in Scotland (0.3).

But some areas in Greater London have far higher repossessions rates with Croydon (4.1) the ninth worst town for repossessions in the UK, and Ilford (3.5) and Enfield (3.3) both with a rate of repossessions that is far higher than the average town.

Sexton said: “The London example shows it’s not as simple as purely North and South as the capital also contains some areas where repossessions are high.

“House prices may be high in the capital and the labour market may be stronger but in such densely populated areas there remain borrowers who are struggling.

“Many borrowers have seen their finances slowly eroded by high inflation and rising living costs. This has been particularly potent in the expensive capital where less affluent borrowers – those who could only just afford to buy – have been badly affected.”

Sign up to our daily email