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Banks' repossession claims reach highest level since 2019

Banks' repossession claims reach highest level since 2019
Samantha Partington
Written By:
Samantha Partington
Posted:
16/05/2024
Updated:
16/05/2024

Claims to the court by mortgage lenders to repossess homeowners’ properties increased year-on-year by 28% to 5,182 in the three months to March, reaching their highest level since 2019.

Actual repossessions, however, rose by 4% year-on-year to 759.

Mortgage and landlord possession statistics released by the Ministry of Justice revealed that, in Q1, all residential mortgage possession actions – from making a claim to repossess through to taking possession of a property – continued their gradual upward trend.

Compared to the same quarter last year, mortgage possession claims increased from 4,035 to 5,182, and orders granted for repossession were up 19% from 2,532 to 3,019. Possession warrants given to lenders were up 9% from 2,636 to 2,881, and repossessions by bailiffs rose 4% from 729 to 759.

Since Q1 last year, the time taken to repossess a residential property has fallen to 45.7 weeks down from 60.9 weeks.

Although all mortgage possession case types have been steadily increasing since Q2 2021, apart from two small dips, they are still short of the pre-Covid 2019 baseline. Claims, warrants and repossession volumes are 16%, 39% and 42% below activity levels in 2019 respectively.

Mortgage possession claims fell from a peak of 26,419 from April to June 2009 in the aftermath of the 2008 financial crash, before stabilising from April to June 2015 at 4,849. They currently stand at 5,182.

Similar trend in orders and warrants

Orders and warrants for possession followed a similar trend to mortgage claims, falling from a peak of 23,850 orders from July to September 2009 and 21,350 warrants from January to March 2009, and stabilising around 2016/17.

Historically, repossessions by county court bailiffs fell from a high of 9,284 in Q1 of 2009 to 934 in Q3 of 2018, the lowest recorded level of the series at the time.

Following the ban on repossessions from March to September 2020, where no repossessions took place, the Financial Conduct Authority (FCA) guidance advised mortgage lenders not to commence or continue possession proceedings until April 2021, unless there were special circumstances. Only 10 repossessions took place from April 2020 to March 2021. This increased consistently after the Covid measures came to an end, to a peak of 780 in Q2 2022. Since then, it has been declining and is at 759 this quarter, up 4% from the previous year.

Landlord possession claims increased

Meanwhile, landlord possession claims increased by 6% from 23,389 to 24,874, while orders granted for repossession rose 3% from 17,644 to 18,154. Warrants issued rose by 9% from 10,503 to 11,407, and repossessions made rose 6% from 6,501 to 6,864.

The average time from claim to landlord repossession has increased to 24.1 weeks, up from 22.4 weeks in the same period in 2023.

Landlord claims have continued to increase this quarter and are now almost at their pre-Covid 2019 baseline. All landlord possession actions have increased compared to the same period in 2023, but at a lower rate than mortgage possession actions.

Related: Arrears and repossessions rise in Q1 2024