31% annual jump in homeowner repossessions in second quarter of 2024

The number of homes being repossessed jumped in the second quarter of this year, according to figures from lenders.

Some 980 homeowner mortgaged properties were repossessed in the second quarter of 2024, marking an 8% increase compared with the previous quarter and a 31% rise compared with the same quarter in 2023.

And 710 buy-to-let (BTL) mortgaged properties were also repossessed, which was 13% higher than in the previous quarter and a 51% annual jump, according to data from UK Finance, which represents the banking and finance industry.

UK Finance said the rise in repossessions of mortgaged properties is largely due to the courts working through historic arrears cases.

Repossessions remain very low compared with historic norms, it said.

The total number of homeowner and BTL repossessions in the second quarter of 2024 was 15% lower compared with the fourth quarter of 2019, just before the coronavirus pandemic struck, and 87% lower than the first quarter of 2009, when repossessions peaked during the financial crisis.

Lenders will always seek to ensure customers remain in their homes and repossession is only ever a last resort after other options have been explored, UK Finance added.

Many lenders have signed up to a mortgage charter, offering a range of tailored options for struggling borrowers.

UK Finance said that the number of homeowner mortgages in arrears was broadly unchanged throughout the second quarter if 2024 compared with the previous quarter, with a 0.5% decrease.

There were 96,070 homeowner mortgages in arrears of 2.5% or more of the outstanding balance in the second quarter of 2024.

The number of BTL mortgages in arrears increased by 1% compared with the previous quarter, reaching 13,570.

The overall proportion of mortgages in arrears remains low, at 1.10% of homeowner mortgages and 0.69% of BTL mortgages, UK Finance said.

It added that the number of borrowers getting into early mortgage arrears has fallen, suggesting there will be a limited increase in arrears cases in the next quarter.

However, the decrease also partly reflects some customers who were previously in early arrears moving into more serious shortfalls, it added.

The Bank of England base rate was cut from 5.25% to 5% last week and mortgage lenders have been cutting some rates in recent weeks, easing some of the strain on borrowers.

However borrowers coming off mortgage rates which were fixed several years ago onto a new deal could still face a payment shock.

Charles Roe, director of mortgages at UK Finance, said: “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.”