Mortgage Repossessions Soar By 90%

November 14, 2022

The worsening cost of living crisis has caused a steep rise in the number of home repossessions in the last quarter, The Independent reports. The Ministry of Justice (MoJ) has recorded significant increases of 91% in the number of both homeowners and tenants who have been issued with court claims, warrants, and repossessions.

The MoJ figures are for the third quarter of 2022, which do not take into account the recent market turmoil caused by the former Prime Minister’s Liz Truss’s ill-fated mini budget. It is feared that rates of homelessness will increase sharply, as there is a severe undersupply of rental properties in some areas of the country. 

The Liberal Democrats Treasury Spokesperson, Sarah Olney, has called for the creation of a £3bn mortgage protection fund, which would offer grants of £300 a month to mortgage holders who have been faced with the steepest repayment increases, and are not able to keep up with the sudden increase in costs. 

She told the publication: “These worrying figures risk being just the tip of the iceberg, with the Conservatives’ disastrous mini-Budget setting off a mortgage ticking time bomb for families across the country.” 

The average change in interest rate levels for mortgages is at its highest level for 14 years, the BBC reports. The mortgage holder for an averaged-priced home will be facing an annual increase of £3,000 a year on their mortgage repayments once they reach the end of their current term, as about 300,000 people do every month. 

The Leader of the Labour Party, Sir Kier Starmer, also criticised the government’s recent performance. He told BBC Radio Humberside: “The instability caused by that kamikaze [mini] budget that basically trashed to the economy, means that many people who thought they had a mortgage can’t afford it anymore. That dream has been shattered.”

Landlords who are faced with steep mortgage rises, coupled with more stringent energy efficiency requirements and less favourable tax rules, are increasingly deciding to sell up, putting more pressure on tenants who are facing higher rental costs. 

A government spokesperson commented: “These statistics show that overall landlord possession claims remain below pre-pandemic levels.”

“Ensuring a fair deal for renters remains a priority for this government. We will deliver our commitment to abolish section 21 ‘no fault’ evictions in this parliament – protecting 1.3 million families with children and helping tenants to find and stay in the right property for them.”

The estate agents Savills predicts that first time buyers will be most badly affected by the current situation, because decreasing affordability means that more people will be excluded from taking out mortgages.

Although house prices are expected to fall by as much as 10% next year, this is not expected to be enough to compensate for the other pressures on the finances of first-time buyers. However, it is worth seeking professional advice to discuss your individual circumstances, if you are thinking of applying for your first mortgage.

If you want to talk to a bad credit mortgage broker in the UK, please visit our website today.

Your home may be repossessed if you do not keep up with your mortgage repayments.

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