UK mortgage possessions jump as higher rates squeeze homeowners

THE number of UK mortgaged homes taken into possession rose 8 per cent in the second quarter of 2024 as high interest rates squeezed homeowners.

Some 980 homeowner mortgaged properties were taken into possession between March and June, according to data compiled by industry group UK Finance. That is up from 910 in the previous quarter and is more than 30 per cent higher than the number recorded a year earlier.

The number of possessions rose, in large part, because the courts have increased their capacity to work through historic arrears cases, UK Finance said in its report on the data. The overall volume of loans in arrears has been kept in check by a large amount of fixed rate mortgages that have not yet come up for renewal since rates have risen coupled with rules introduced since the financial crisis to ensure borrowers could afford their loans if rates increased.

British landlords, already facing the prospect of more stringent regulation, are more exposed. The number of buy-to-let mortgages taken into possession rose even more sharply, climbing to 710 between March and June. That is 13 per cent more than in the previous quarter and over 50 per cent higher than a year earlier.

A record number of buy-to-let firms were established in the UK last year as landlords sought to cut costs by shifting rentals into a corporate structure. BLOOMBERG