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Repossessions drop to lowest level since 1980

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The number of homes taken into possession by mortgage lenders has fallen to the lowest level in almost forty years, data from UK Finance has revealed.

In total 4,580 homeowner possessions took place in 2018, the lowest figure since the 3,480 repossessions in 1980. However, UK Finance noted there are significantly more outstanding homeowner mortgages today, with nine million active accounts compared to 6.2 million back in 1980.

There were 77,610 homeowner mortgages in arrears of 2.5% or more of the outstanding balance in the final quarter of 2018, a 5% fall from the same quarter of 2017.

On the buy-to-let front, 540 properties were repossessed in the final quarter of last year, down by 14% from the previous year, while there were 4,690 mortgages in arrears of 2.5% or more, which is unchanged from the same period of last year.

Jackie Bennett, director of mortgages at UK Finance, suggested that repossessions had fallen so low due to a combination of a low interest rate environment and lenders showing flexibility when working with borrowers who are in financial difficulty.

She continued: “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.”

Jonathan Harris, director of Anderson Harris, said it was encouraging that repossessions were at their lowest level in almost four decades, but warned there was no room for complacency, particularly with the potential for base rate rises ahead.

He continued: “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.”

Second charge repossessions stay low

Elsewhere, the Finance and Leasing Association announced that second charge repossessions in 2018 totaled 147, an increase of 8.1% on 2017.

However, the fourth quarter saw a sharp year-on-year fall in repossessions, down by 26.3% to 28.

The FLA emphasised that the number of properties repossessed during the year represented just 0.09% of the number of outstanding accounts.

Fiona Hoyle, head of consumer and mortgage finance at the FLA, said: “The low number of repossessions in the market shows that lenders are committed to helping those in ‎financial difficulties. The sooner customers make contact, the easier it is to find a solution.”

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