Mortgage repossession figures returning to pre-pandemic levels

Mortgage possession actions are slowly recovering from the impact of the pandemic, new government figures have indicated.

Claims, orders and warrants are currently around 53%, 47% and 55% below the pre-pandemic levels of Q1 2019.

As a result of coronavirus and associated actions, figures published by the Ministry of Justice confirmed that all mortgage possession actions have dropped significantly. Compared to the same quarter in 2019, mortgage possession claims (2,890) are down 53%.

Mortgage orders for possession (2,293) are also down 47%, while warrants issued (2,162) are down 55% and repossessions (571) are down 57%.

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 complete cessation of repossession proceedings between March and September 2020 where no repossessions took place, guidance from the FCA advised mortgage lenders not to commence or continue possession proceedings until April 2021.

As a result, there were just 10 repossessions over the whole of last year from April 2020 to March 2021, and only 571 in January to March 2022, a total down 57% compared to the same quarter in 2019.

Before the impact of COVID, the historical fall in the number of mortgage possession actions since 2008 has generally coincided with lower interest rates. Furthermore, the downward trend recorded in recent years mirrors that seen in the proportion of owner-occupiers.

Founder of the mortgage comparison platform Dashly, Ross Boyd, commented: “Though mortgage and landlords possession actions are down on 2019, pre-pandemic, the 100% increase compared to the first quarter of 2021 is a trend that is worth monitoring. It could be a natural readjustment following the passing of the Coronavirus Act in March 2020.

“Fortunately, many homeowners are on exceptionally low fixed rates and that will support their ability to maintain payments. It's what happens when they come to the end of their fixed rates that matters now. Many will be in for a serious rate shock if rates continue to rise, something that will be exacerbated if inflation is still well above target.”

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