Following the latest Mortgage and landlord possession statistics published this morning, which reveal repossessions by county court bailiffs increased from 45 to 770 (1,611%) between April and June, three experts share their thoughts:
Tahina Akther, barrister and co-founder at Wildcat Law: “Unfortunately this is the tip of a very large iceberg. We are seeing a significant number of early stage cases. Many of these will no doubt ultimately end in repossessions. To put this in perspective, we are a long way off the peaks of the early 1990’s but then we are barely getting started with this latest recession. Repossessions are always a last resort and are often a lengthy legal process. This means the data we are seeing reflects the situation of many months ago. In short, this is the COVID effect followed by the cost of living crisis. Many people have simply not recovered financially from COVID and hence there is no option available to lenders or the Courts but to repossess.”
Lewis Shaw, founder of Mansfield-based Shaw Financial Services: “Now that the Government moratorium on repossessions is over, it’s unsurprising that we’ve seen a considerable rebound, albeit still at lower levels than pre-Covid. However, with the cost of living crisis looming over us, it’s odds on that these figures will continue to rise as people’s disposable income is stretched to breaking point.”
Richard Pike, Phoebus Software sales and marketing director, says: “Although the headline figure from UK Finance today shows a fall in arrears in Q2, the underlying data is pointing to a shift as the pressures from rising interest rates and inflation take hold. The rise in homeowner possessions, of 5% on Q1, is perhaps an early indicator of things to come.
“The prediction that household energy bills are likely to average £350 per month by January next year is something that, added to the rising cost of mortgages, will put immense pressure on many households. Now is the time for borrowers and lenders to be talking to each other and looking at ways to try to manage potential arrears or defaults. It’s not a terrible picture at the moment, but unfortunately there will be some that find themselves in a difficult position over the next six to twelve months, unless things change dramatically.
“That said, lenders should now be investing in ensuring their standard arrears procedures managed on servicing platforms are as automated as possible so that cases, that need to be managed by exception, can be given the time and effort required to ensure the right borrower outcomes”.