Mortgages.scot

Updated data has been released showing that c700 homes were repossessed Q3 2022. In addition, c390 BTL properties were also repossessed. The data is provided by market voice UK Finance.

In-depth

Overall there were c75,000 homes in arrears of at least 2.5% of the balance outstanding on the mortgage held. Around 29k homeowners had arrears that represented at least 10% of their mortgage balance. Overall the total number dropped 1% since Q2.

On the BTL side, there were 5,760 mortgages in arrears of at least 2.5% of the mortgage balance which represented a 2% increase since Q2. 1,780 had arrears of at least 10% of the mortgage balance. The former being a rise of 2% on Q2 figures and the latter a 1% reduction.

The 700 homes repossessed in Q3 was an increase of 15% vs Q2. 11% rise for BTL. That is significant and it is likely to continue climbing in Q4.

Lenders

Lenders don't want to see numbers increasing any more than homeowners do, that said there is only so much they can do to support. Following COVID arrears at most lenders have been allowed to increase to levels that would usually have seen action taken through the courts far quicker.

Now we have a situation where rates are increasing at hitherto unseen levels for many borrowers. So lenders are in the main being fairly patient. That will change of course.

First, we had COVID, then we have interest rate hikes, and now most market analysts are predicting a fall in property prices.

Some borrowers are likely to be heading towards or perhaps already are at a stage where the outstanding mortgage and balance of arrears is greater than the value of the property and a negative equity position is present. This will force lenders to start acting more swiftly.