UK Finance: Repossession count at 40-year low in 2018

Michael Lloyd

February 14, 2019

There were 4,580 homeowner possessions in 2018, the lowest since 1980 when there were 3,480 possessions, UK Finance’s Mortgage Arrears and Possessions Update has found.

There were 77,610 homeowner mortgages in arrears of 2.5% or more of the outstanding balance in Q4 2018, 5% fewer than in the same quarter of the previous year.

Jackie Bennett, director of mortgages at UK Finance, said: “Homeowner possessions reached their lowest level in almost 40 years in 2018, aided by a historically low interest rate environment and lenders showing continued flexibility when working with borrowers in financial difficulty.

“Mortgage arrears also remain at historically low levels, with the majority of borrowers continuing to repay their mortgages in full and on time each month.

“We would always encourage anyone with concerns about making their mortgage repayments to contact their lender to discuss the options and support available to them. Repossession is always a last resort.”

There were 4,690 buy-to-let mortgages in arrears of 2.5% or more of the outstanding balance in the fourth quarter of 2018, unchanged from the same quarter of the previous year.

Some 1,130 homeowner mortgaged properties were taken into possession in the fourth quarter of 2018, 3% fewer than in the same quarter of the previous year. Furthermore, 540 buy-to-let mortgaged properties were taken into possession in Q4, 14% 14% year-on-year.

Jonathan Harris, director of mortgage broker Anderson Harris, added: “Encouragingly, the number of homes being repossessed by lenders is at its lowest level in almost 30 years.

“However, there is no room for complacency. Possessions may be declining but that can change and borrowers need to be prepared. We suspect that when it comes to their finances there are many people who don’t have a buffer to tide them over should they get into difficulty.

“Interest rates remain at low levels but there is always a chance they could rise. Borrowers must plan ahead and consider how they would cope if this happens. Fixed-rate mortgages give certainty and help with budgeting, while remaining competitively priced.

“It is also vital that borrowers keep their lender in the loop if they are struggling to pay their mortgage. Lenders are being flexible and showing forbearance but it is much easier and less stressful to come up with solutions early on than further down the line when options may be much more limited.”

And Keshava Raghubeer of Sixteen South West LTD, said: “ This is a really good sign for the economy and shows that we as a nation are possibly in a decent fiscal position ahead of  the potentially unknown outcomes of going into and coming out of Brexit.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, added: “The picture painted by these numbers is largely what we might have expected.

“In other words, borrowers, particularly landlords, are finding it tough but lenders are working hard with their customers to avoid or reduce repossessions if possible.

“Repossession is a last resort and rarely in anyone’s best interests, particularly as the market remains soft. Hopefully, as uncertainty reduces and more strength returns to the market post-Brexit we will see a return to more normal conditions.”

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