Market factors, evolving lender practices, unemployment rates and economic policies have all influenced repossession statistics in the UK historically. In this article we have collected data from various sources to determine repossession trends in the UK.
Repossession Statistics 1969 to 2016:
|Year||Number of Mortgage Repossessions|
|2016||2200 (for 2016’s First Quarter only)|
How Long Does it Take to Complete a Mortgage Repossession?
According to the 2015 repossession stats by Gov.uk, it takes:
- Approximately 20 weeks (5 months) for the court to issue an order once a repossession claim is made by a mortgage company or lender.
- Between 80 and 90 weeks (20 months apprx) for the court to issue a warrant after a repossession order is issued.
- 100 weeks or more for the actual repossession to complete from the day the claim was made. 100 weeks means roughly 2 years.
Historical Year on Year Data
Repossessions fluctuate on a regular basis, but these changes aren’t always easy to predict. Major economic and political events, like the 2007-2008 global crisis and the 2016 Brexit referendum, have a significant impact on the market. Here are some annual trends that might hint at what’s ahead:
How Many Repossessions Occurred Before and During the 2007/2008 Financial Crisis?
Data published by the Council of Mortgage Lenders, or CML, shows that from 1995 until the 2007-2008 financial crises, arrears on mortgages generally decreased. From that point on, the number of borrowers who were behind climbed until hitting a peak in 2009.
According to the housing charity Shelter, repossessions accounted for around 0.43 percent of all lending in 2009. This high was a notable increase from the 0.07 percent seen in 2003 and 2004, and it accounted for 48,900 properties being taken into possession.
How Many Repossessions in 2012?
Following the financial crisis, repossessions began slowly subsiding. In 2012, only around 33,900 mortgaged properties, or 0.30 percent of all housing loans, were repossessed. During this year, the majority of repossessions by county-court bailiffs in England and Wales were driven by mortgage troubles.
How Many Repossessions in 2013?
By 2013, mortgage repossessions had dropped to 28,900, or 0.26 percent. Low quarterly figures were seen as a positive factor, but experts also noted that the number of borrowers in severe arrears was still growing.
How Many Repossessions in 2014?
In 2014, repossessions continued falling. Unfortunately, many property owners still had ample reason to worry.
Shelter showed that around 215,000 households remained at risk of repossession or eviction and stressed that interest rate growth was just exacerbating the problem. This same year, areas like Bolton, Salford, Nottingham, Peterborough and London’s Newham were revealed as trouble spots.
How Many Repossessions in 2015?
Bolton, which had set the record for repossessions since 2004, continued to hold top position. Along with Manchester, Sunderland and some 73 percent of all Northern cities, Bolton was notable for having more repossessions than the national average.
Nonetheless, 2015 was an interesting year because the gap between repossession statistics in the North and the South narrowed dramatically. Experts claimed this was partially due to the fact that repossessions decreased nationwide, although the North still led the South by a significant factor. The high repossession rates that had long plagued London boroughs also exhibited great progress. The only question was whether these improvements would last.
How Many Repossessions in 2016 and Beyond?
The beneficial changes observed in 2015 were related to factors like the Mortgage Market Review’s implementation during the prior year and other government efforts to bolster the housing sector. CML analysts stated, however, that even these initiatives and programmes might not offer sufficient assistance to at-risk property owners in the years to come.
Experts predict housing initiatives will take time to build up steam. Market segments like buy-to-let may suffer negatively from tax-treatment changes in the interim. As in other years, rising interest rates should prove challenging to borrowers.
The total number of mortgages in arrears also continued falling through the first half of 2016. Still, repossession disparities existed between landlords who bought to let and home-owners, with lenders being less inclined to help buy-to-let landlords avoid repossession actions.
Market factors also had regional impacts. For instance, in May 2016, mortgage servicer HML observed that South Wales, Northern Ireland and other regions could suffer from employment woes due to trouble in the steel industry. Notably, HML’s best-case forecasts depended on interest-rate increases being postponed.
In what may bode ill for the future, U.S. bond-dealer rates spiked in the aftermath of the Brexit referendum. While this didn’t directly impact the U.K. housing market, some see it as a sign of things to come. The Bank of England’s governor even stated that economic growth would soon slow and highlighted the need for more stimulus actions to promote recovery.
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