So it’s become clear that we’re now looking at the first quarterly increase in home repossessions across the UK since 2014.
And that’s without taking into account the potential consequences of the recent increase in interest rates announced by the Bank of England.
But apart from it being extremely unfortunate for those concerned, what does this means when viewed from a wider perspective.
Well, the obvious immediate issue is that of higher interest rates potentially plunging even more borrowers into arrears over the coming months. Those struggling to make ends meet as it is may find the interest rate hike taking them into the red.
Compared to Q3 last year, the same period brought about a 5% increase in home repossessions in total. Interestingly, while the number of owner-occupied property repossessions increased significantly, the number of properties repossessed from buy-to-let landlords fell.
On the plus side, the overall repossession rate in the UK remains at around its lowest level in recorded history. Jonathan Harris, director of mortgage broker Anderson Harris says:
“Worryingly, repossessions are on the rise, albeit from an historically low level.”
“These numbers do not reflect the recent interest rate hike either and with more rate rises a possibility, home repossessions may well increase further. We suspect that when it comes to their finances there are many people who don’t have a buffer to tide them over should they get into difficulty.”
The problem with the majority of financial shortfalls is of course the way they are so unexpected in nature. Hence those affected having very little time to contend with them when they occur.
So the key question is – what can borrowers do to hold onto their homes in the event that no financial ‘buffer’ is in place.
In some instances, the lenders themselves will offer support in the form of amended or temporarily loosened repayment terms, in order to help the borrower cope.
In others, they’ll do little to nothing to help and simply allow their customers to slip deeper into arrears. At which time, short-term borrowing options like bridging loans and secured personal loans can be ideal for tiding things over and getting back on track.
Even with poor credit and limited income, there are countless opportunities to explore than can help prevent the prospect of repossession becoming a reality.
Experts also believe that the lenders themselves must begin playing a more concerted role in ensuring their customers are given appropriate help and support when dealing with financial difficulties. Anderson Harris says:
“It is also vital that borrowers keep their lender in the loop if they are struggling to pay their mortgage.”
“Lenders are being flexible and showing forbearance but it is much easier and less stressful to come up with solutions early on than further down the line when options may be much more limited.”
If you find yourself in a position where your home may be at risk, speak to an experienced and reputable broker or advisor at the earliest possible stage – along with your mortgage lender – to explore the options available.
In all instances, the very worst thing any borrower can do is ignore the problem and hope it goes away of its own accord.