The number of homes being repossessed jumped by 15% in the third quarter of 2022. That equated to some 700 homeowner-mortgaged properties, according to figures from trade association UK Finance.
Meanwhile, a total of 390 buy-to-let-mortgaged properties were repossessed in the same period, which was up by 11% compared with the previous quarter. Last week, the Commons Treasury Committee heard evidence suggesting that the buy-to-let sector could be particularly hard hit by rising mortgage rates.
Mortgage rates have climbed as the Bank of England base rate has risen in recent months. There was also a jump in mortgage rates amid the market turmoil which followed the mini-budget earlier this autumn.
Property agents Savills recently predicted that UK house prices could fall by about 10% next year before starting to recover in 2024. First-time buyers and buy-to-let investors will bear the brunt of increased affordability issues next year, adding to pressures on rental prices, according to predictions by Savills.
UK Finance’s figures also showed that 74,440 homeowner mortgages were in arrears of 2.5% or more of the outstanding balance in the third quarter of 2022, which was 1% fewer than in the previous quarter. Within the total, there were 28,910 homeowner mortgages with more significant arrears, of 10% or more of the outstanding balance – this was broadly unchanged from the previous quarter when the figure was 29,030.
Meanwhile, 5,760 buy-to-let mortgages were in arrears of 2.5% or more of the outstanding balance in the third quarter of 2022, which was 2% more than in the previous quarter. Within the buy-to-let mortgages arrears total, there were 1,780 loans with more significant arrears, representing 10% or more of the outstanding balance. This was 1% fewer than in the previous quarter.
Separate figures released by the Ministry of Justice on Thursday showed that landlord possession claims in the county courts of England and Wales more than doubled from 10,202 in the third quarter of 2021 to 21,012 between July and September 2022. Compared with the same quarter in 2021, mortgage possession claims were up by 30%, with 3,680 claims recorded in the latest quarter.
Liberal Democrat Treasury spokeswoman Sarah Olney said: “These worrying figures risk being just the tip of the iceberg.” She said a “mortgage protection fund” should be established to target those most at risk of losing their homes.
Matt Downie, chief executive of the Crisis charity, said: “This is a time of huge uncertainty for many renters, who are worried about being forced out of their home, falling into arrears or being hit with a rent hike. The rising cost of living means that, for more and more people, housing costs are outstripping their incomes. The added threat of being made homeless is causing unimaginable stress for thousands."
