More property repossessions - but not a cause for worry, say experts

UK Finance’s latest data shows the percentage of mortgaged properties taken into possession has risen, but the trade body insists this is not a worry. 

It says the rise is largely due to the HM Courts Service increasing capacity to work through historic arrears cases.

UK Finance insists that possessions numbers remain very low compared to historic norms. A total of 1,690 homeowner and Buy To Let mortgaged properties were possessed in the second quarter of 2024. 

This is 15% lower than the 1,980 seen in the final quarter of 2019, before the pandemic, and 87% lower than the 13,200 seen in the first quarter of 2009, which was the peak of the previous possessions cycle during the financial crisis. 

In terms of arrears, there’s been a marginal decrease (less than 0.5%) in homeowner mortgages in arrears to 96,070 in Q2 2024, compared with Q1 2024. 

The number of Buy To Let properties in arrears showed a marginal increase (just over 0.5%) compared with the previous quarter, to 13,570. 

The overall proportion of mortgages in arrears remains low, at 1.1% of homeowner mortgages and 0.69% of BTL mortgages. 

UK Finance says this points to fewer customers falling into early arrears and suggests we’ll see a limited increase in arrears cases in the next quarter. However, the decrease also partly reflects some customers previously in early arrears moving into more serious arrears shortfalls. 

For comparison, the number of homeowner and BTL mortgages in arrears in Q1 2009, the peak in arrears numbers during the global financial crisis, was 209,600 – almost twice the 109,650 seen in the first quarter of this year. 

Charles Roe, director of mortgages at UK Finance, says: “The number of mortgages in arrears has remained broadly flat compared to the previous quarter, which is good news following recent increases. This reflects the fact, that while many households remain under pressure, the challenges of higher rates and the cost of living have begun to ease.  

“However, we know that this will not be the case across all households, and lenders want to support anyone who might be struggling. Lenders offer a range of support to anyone worried about their finances. If you are worried about your finances, please reach out to your lender as soon as possible to discuss the support options available. Doing so won’t affect your credit score.”