Housing repossessions have started to rise dramatically in the third quarter of 2022, representing a 15% increase compared to the previous quarter. According to the Ministry of Justice, repossession, court claims and warrants have all significantly increased.
Exorbitant costs have forced delayed mortgage payments by borrowers and made mortgage payments for homeowners unaffordable. According to estimates, more than 200,000 homeowners in London who have variable rates will now experience an immediate increase in their mortgage payments. As a result, the cost-of-living crisis is intensified.
On comparing the current scenario to the same quarter in 2021, statistics show that mortgage possession claims surged from 2,832 to 3,680. There has also been a massive increase in landlord possession actions. Tenant possession claims grew from 10,202 to 21,012 (106%) from the same period in 2021 and repossessions from 4,891 to 5,403 (10%). According to Shelter, 2.5 million renters are behind in rent, an increase of 45% since April 2022.
All regions have witnessed an increase in possession claims, while London remained the primary location for landlord claims. Statistics also show that there were 28,910 homeowner mortgages with arrears of 10% or more of the outstanding balance. Compared to the previous quarter when the number was 29,030, this remained largely stable. According to real estate professionals, first-time buyers and buy-to-let investors will be hardest hit by rising affordability concerns in the coming year, which will put additional pressure on rental costs.
The sharp rise in possession proceedings also puts further pressure on the housing courts and has had a devastating impact on affected individuals. One such individual, Nicholas Wilson, says he has trouble making ends meet because his monthly mortgage payments have nearly doubled since February. He is a 65-year-old who is awaiting a cancer diagnosis and has been vocal about his struggles. He stresses that people feel increasingly desperate when they see no way out of this crisis.