Claims by mortgage lenders to repossess a property have continued to rise, reaching their highest level in five years, as households continue to struggle with the impact of high interest rates.
The jump follows the increase in UK interest rates to a 16-year high of 5.25% last summer, where they remained until being trimmed to 5% this month.
That created a ‘mortgage timebomb’, as borrowers faced sharp rises in mortgage payments when their old fixed-rate deals ended.
Data released by the Ministry of Justice (MoJ) shows that mortgage possession claims grew by 34% from 3,991 to 5,343. Mortgage orders for possession also went up 34% from 2,529 to 3,395, warrants issued are up 9% from 2,679 to 2,918 and repossessions went up 29% from 660 to 854.
Landlord possession claims increased by 9% from 22,526 to 24,495, orders by 15% from 16,029 to 18,436, warrants went up 12% from 9,957 to 11,172 and repossessions increased 16% from 5,950 to 6,927.
The median average time from claim to mortgage repossession has decreased to 45.9 weeks, down from 48.7 weeks in the same period in 2023.
The City of London saw the highest rate of mortgage possession claims, with 294 per 100,000 households owned by mortgage or loan.
The highest private landlord possession rates were also found in the capital, with 7 of the 10 highest rates occurring in London.
Repossession Rescue Network founder Patricia McGirr says: “A significant number of UK borrowers have hit a financial iceberg over the past few years and, sadly, there aren’t enough lifeboats for those that have gone overboard.”
“If people already struggling with historically low interest rates couldn’t keep afloat before, they’re certainly going to feel the icy waters when they remortgage. The fact is, lenders keep repeating the same mistakes.”
“If your credit is good, you can expect better rates, but at a time when every penny counts, you’re penalised based on risk. Although rates have dropped a little recently, we need a more joined up approach to mortgage arrears and alternatives to repossession. I shudder at the mental health crises that lie behind these figures.”
Meanwhile, Lawson Financial director Michelle Lawson states: “There is some good news in these figures in that the residential homeowner figures have stabilised with the lightest arrears decreasing.”
“The telling news is the arrears increasing on buy-to-let properties, which reflects the relentless pressure on landlords and the downtrodden private rental sector. This Government really needs to get a grip, and quickly, on the housing crisis for the most vulnerable in society.”
“Not doing so will decrease stock, increase demand on lower supply and push rents up further. Private landlords should be seen as part of the solution and not the problem.”
