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UK Finance: possessions up 50% in first quarter of year – reaction from brokers

by | May 18, 2023

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It has been revealed that 750 homeowner mortgaged properties were taken into possession in the first quarter of 2023, which is 50% greater than in the previous quarter, industry experts and professionals share their views and thoughts on this recent update:

Samuel Mather-Holgate of Swindon-based advisory firm, Mather & Murray Financial: “This data will come as a crushing blow to the FCA and the Bank of England. If anyone was considering how the affordability stress tests worked, it is now abundantly clear they don’t when rates rise this quickly. Repossession is the final stage of a long process, and these rose by 50% over the quarter. This unfortunately means there is more bad news to come. Considering the menial effect of higher interest rates on the type of inflation we have, the Bank of England should be ashamed of itself for creating the misery we are seeing and the crisis that is developing.”

Justin Moy, founder at Chelmsford-based mortgage broker, EHF Mortgages“This data does not make good reading. Some of this will be directly associated with higher mortgage rates, some will be the higher living costs that we are having to deal with. Mortgage lenders are legally obliged and genuinely wish to help borrowers who are in financial difficulty, and can put a variety of plans together to help in the short term, such as interest-only or lengthening the term. A few of my clients with such challenges have been very pleased and surprised when they have spoken to their lender. None of us like to admit problems, but early action will make it much easier to remedy any situation. Don’t be afraid to speak with your adviser or lender if you are struggling.”

 
 

Bob Singh of Uxbridge-based mortgage broker, Chess Mortgages“It’s no surprise that many families and landlords have succumbed to the relentless pressure of high costs of living and spiralling interest rates. With the Bank of England using its only tool of raising interest rates to control inflation, this is an unintended consequence of their actions placing further pressure on the Government purse to rehouse the affected parties at a time when rents are at an all-time high and supply is low. The message here for those struggling is to take advice and communicate with lenders, who are very reasonable under these circumstances and repossession is often a last resort for them. Many lenders are missing out on the opportunity to design products and policies to help these borrowers. As draconian as it may seem, how many lenders insist on income protection or life cover? Hardly any. This responsibility also falls on advisers to ensure the client takes out suitable redundancy/PHI cover to ensure the income continues.”

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