Home repossessions flatline since interest rates climbed

Home repossessions flatline since interest rates climbed

0:01 AM, 26th April 2023, About 10 months ago 2

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Home repossessions have remained flat since interest rates started to climb last autumn, but in one region they have rocketed by 30% since December 2021, research reveals.

The findings from House Buyer Bureau show that in the England and Wales property market, most regions have seen repossessions fall since interest rates increased.

The property purchasing specialist says that government data shows that 3,219 homes were repossessed between December 2021 and December 2022, that’s up just 0.4% between November 2020 to November 2021.

‘Homes being repossessed across England and Wales’

The firm’s managing director, Chris Hodgkinson, said: “Since interest rates started to climb, the number of homes being repossessed across England and Wales has remained largely flat, but while this suggests an overarching air of stability, the top line statistics mask some quite drastic fluctuations at a regional level.

“Regions such as Yorkshire and the Midlands have performed particularly well during the pandemic, but the figures suggest that buyers in these regions have been more prone to over-borrowing during the pandemic market boom in order to climb the ladder at a far more inflated cost.”

He added: “Now that interest rates have started to climb, the increased cost of borrowing is likely to be a contributing factor behind a steep increase in the number of homes being repossessed.”

In the East of England just 59 homes have been repossessed

The House Buyer Bureau found that in the East of England just 59 homes have been repossessed since December 2021, a drop of 46% versus the same time period before.

In London, property repossessions have fallen by 18%, while the South East (-12%), South West (-3.9%), North East (-1.1%) and North West (-0.7%) have also seen a reduction.

However, while the North West may have seen a drop in the number of homes being repossessed, the region still ranks as the nation’s property repossession hotspot.

That’s because it accounts for 21% of all homes repossessed since interest rates started to climb.

Ranks second in England and Wales for homes repossessed

Yorkshire and the Humber ranks second in England and Wales for homes repossessed, accounting for 16% of all property repossessions.

However, there were 501 homes repossessed since December 2021, a 30% increase on the previous year and the largest annual increase of any region last year.

The North East is third in the table (15%), while Wales (+14%), the East Midlands (+8%) and West Midlands (+6%) have also seen an increase.


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Comments

JB

10:54 AM, 26th April 2023, About 10 months ago

I would have thought we wont see the effects of interest rate rises until next year - assuming it takes a year to get into increasing difficulty and have a property repossessed.

Reluctant Landlord

14:27 PM, 26th April 2023, About 10 months ago

I understood it that the banks are under pressure NOT to repossess and have to go through a number of stages before they can do this...so yes it will take a while for such numbers to filter though...but clearly there must already be some in the pipeline and there is the potential for a whole lot more if rates increase and LTV issues kick in if mortgage holders look to re-mortgage as a direct result of other things like falling house prices/other cost of living issues and income drops/job losses...
Another issue that we wont see the real effect off for a while yet...but it will be inevitable for some.

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