Repossessions double raising fears more mortgage holders could lose homes as interest rates rise
Repossessions by banks more than doubled in the last three months of 2022, new figures revealed on Thursday, raising fears that more mortgage holders could lose their homes as interest rates rise.
Data released by the Ministry of Justice showed that repossessions by county court bailiffs across England and Wales rose from 313 to 733 between October and December last year — a spike of 134 per cent.
At the same time the figures showed a similar trend for tenants with landlord repossessions jumping from 2,729 to 5,409 — a rise of 98 per cent. The data comes a week after the Bank of England raised interest rates for the 10th time in a row to a 14-year high of 4 per cent.
Although inflation is expected to fall sharply later this year as energy prices drop, the Bank’s governor Andrew Bailey told MPs on Thursday that he was still “concerned” about the continued persistence of rising prices.
That could indicate even more hikes in interest rates as the Bank tries to get inflation — at 10.5 per cent in December — back under control.
While the number of repossessions are a tiny number compared to the millions of homeowners across the country, the big increase could indicate that many more are falling behind with payments.
Banks have been urged by MPs to show patience with mortgage holders who are struggling, with 250,000 London homeowners facing a huge spike in monthly payments this year as they come off cheaper fixed rate deals.
Liberal Democrat treasury spokesman Sarah Olney said: “The capital and south-east have been hit hardest by the mortgage timebomb with bills rising by hundreds of pounds a month, yet still the Government refuses to act.”
But a spokesman for the Department for Levelling Up, Housing and Communities said: “While today’s statistics show that overall mortgage and landlord possession claims remain below pre-pandemic levels, we recognise that both renters and homeowners are struggling with the cost of living.”
The figures come ahead of the publication on Friday of the UK’s latest GDP figures which will show whether Britain’s flagging economy narrowly escaped a recession in the second half of 2022.
Although Britain’s output contracted by 0.3 per cent in the three months from July to September, economists are increasingly confident that government support for energy bills and pandemic savings helped the economy to be more resilient in the final quarter of last year.
Huw Pill, the Bank’s chief economist, said in a report that he anticipated an “extended period of weakness”.