Repossession North-South divide closes

Sarah Davidson

January 15, 2015

There were 2.5 repossessions per 1,000 households in the North in the first half of 2014 (H1 2014), compared to 1.7 repossessions per 1,000 households in the South.

This compares to 2.9 repossessions per 1,000 households in the North and 2.0 in the South in H1 2013, meaning the gap has reduced by 16% year-on-year.

Total home repossessions have fallen 14% year-on-year as a result – from 27,105 in H1 2013 to 23,285 in H1 2014.

The average rate of repossessions in England & Wales now sits at 2.1 repossessions per 1,000 households, down from 2.4 in H1 2013. Repossessions have fallen in every region of England & Wales.

However, over three quarters (76%) of Northern towns still have a repossession rate above the national average, suggesting the North still has a way to go to catch up.

Richard Sexton, director of e.surv chartered surveyors, said: “The repossession rift between North and South is beginning to knit itself back together, helped by a jobs boom across the country.

“People all across England and Wales have a firmer grasp of their finances compared to a year ago and the Bank of England continues to hold interest rates low, which has been a real boon to those who are already on the housing ladder – allowing them the chance to pay down debts whilst accessing cheaper mortgage repayments.

“At the same time, wage growth has outpaced inflation for the first time in five years, meaning the cost of living squeeze has started to ease.

“This really boils down to people having more money in their pockets than a year ago. Savers may have suffered while the base rate has stayed low, but for those on the edge of the repossessions cliff, it has allowed them the respite needed to claw back their finances and move back into financial security.

“Moving forwards, the Mortgage Market Review will ensure that future borrowers are able to keep up with repayments, despite fluctuations in interest rates. It’s heartening to see repossession rates falling in those areas which have previously been most deeply affected.”

Lancaster (1.60) and Carlisle (1.59) were the only areas in the North West where repossession rates were below average. In Wales, only Llandrindod Wells (1.50) managed to get below the average.

Sexton added: “Some of the Northern cities that have struggled the most with repossessions have seen the fastest improvements.

“Blackpool, for example, had the second highest repossession rate across England and Wales in 2013 – now it’s speeding down the rankings, leaving even a few struggling areas of London dazed in its wake.”

London is tied with Wales for the least-improved repossession rates on an annual basis from the first half of 2013 to the first half of 2014. Repossession rates in Wales and the capital fell by 12%, compared to a 14% average across the rest England & Wales.

There were 2.1 repossessions per 1,000 households in the capital in H1 2014, exactly the same as the average across England & Wales. However, London contains some of the worst and best areas in terms of both repossession rates and year-on-year improvements.

In the Greater London town of Romford – the seventh worst postcode area for repossessions in England & Wales – there were 3.12 repossessions per 1,000 households in H1 2014. Meanwhile Croydon was the eighth worst postcode area for repossessions (3.1). At the other end of the spectrum, West-Central London (0.4) and West London (0.9) have not only the lowest rates of repossession in London, but also the lowest across England & Wales.

Sexton concluded: “London, as ever, is something of a law unto itself. A closer look at rates of improvement in Romford, for example, reveals that their proportion of repossessed houses might be among the worst, but their rates of improvement are nearly 50% higher than average.

“The ever-present problem of housing shortages in London keeps crowds of buyers hovering around the outskirts and desperately trying to keep up with mortgage repayments.

“It’s not enough to glance at averages when dealing with any region, and London is a case in point: it might match the UK average for repossession rates per 1,000 households, but this figure conceals the suburban towns struggling to get by – and the towns bravely tackling problem.”

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