Repossessions to reach 33,000 in 2013
Tuesday, 26 February, 2013
Analysis has been undertaken on data containing over one million mortgage accounts and HML found that Northern Ireland will have the highest repossession rate at 1.29%, with 4,073 properties set to be repossessed.
The South West is predicted to have the lowest repossession rate at 0.18% (1,579 properties), although the North is the region where the least homes will be repossessed (1,442).
HML’s regional repossession forecast is the only one in the UK to break down repossessions by region.
The Council of Mortgage Lenders recently released its repossession data, which noted that there were 7,700 repossessions during the fourth quarter of 2012, making it the lowest quarterly figure since the same three-month period in 2007.
In total, there were 33,900 repossessions last year, so HML’s 2013 prediction of 33,000 represents approximately a 2.7% decline on 2012.
Director of Business Intelligence at HML Damian Riley said:
HML’s forecast for 2013 is largely neutral, with a 2.7% decline in repossessions to 33,000 during the year. We have a number of concerns related to customers ability to pay their mortgage and repossessions.
Firstly, interest rates will inevitably rise. Secondly, there is also the ticking time bomb of borrowers with poor credit history who hold interest-only mortgages and have to repay the principal amount at the end of the mortgage term. Unless innovative solutions are found, repossession may be the only way for the lender to recover on the loan.
With inflation at 2.7% and likely to stay above the Bank of England’s own 2% target for some time to come, workers continue to face reducing spending power that will put the squeeze on those mortgage borrowers who are close to the limit of their ability to make monthly repayments.
If you have concerns about making mortgage payments, our advice is to speak with your lender as soon as possible; the earlier you engage, the more likely you are to find a solution that satisfies both borrower and lender and the less likely you are to be repossessed.