There was a staggering 56% increase in mortgage possession claims between July and September compared to the same quarter in 2023, according to official data published this morning by the Ministry of Justice. In short, households are really struggling and it’s brutal out there. Things haven’t been made any easier by the Autumn Budget, experts say, which has sent mortgage rates soaring north again piling further pressure on borrowers. Technically speaking the cost of living crisis is over but in reality, based on this data, it most certainly is not. As one broker said: “All in all this is a ticking time bomb.”
what the experts say...
Patricia McGirr
Mortgage & Debt Expert
Founder at Repossession Rescue Network
"Families are losing homes while policymakers snooze. A whopping 56% rise in mortgage possession claims tells you one thing: the system’s broken, and real people are paying the price. Landlords are facing the same problems but I see little sympathy for them. Quite the reverse. The private rental sector is under the cosh with no regard for the social impact of widespread tenant evictions or fewer available homes. Rising interest rates and shrinking support are a recipe for repossession chaos and it’s unfolding right now. When will the powers-that-be wake up? We need bold action, like freezing repossessions, cutting red tape, and giving homeowners and landlords room to breathe. Families deserve stability, not a fast track to the curb. Let’s see some backbone from those in charge. Enough with the numbers; it’s time for solutions."
Hannah Bashford
Mortgage Expert
Director at Model Financial Solutions
"This data is a sad reminder of the struggles many people are facing to keep up with the cost of living and increased interest rates. There is always a lag in the data and the Mortgage Charter has been propping up some people by offering interest-only payments for 6 months, but once those end, they are back to paying a much higher amount than they were previously, which can get them into difficulties. That's clearly proving the case given this data."
Daniel Hobbs
Mortgage & Network Expert
Managing Director at New Leaf Distribution
"This is not an easy read and behind these figures lie countless sad stories. It shows the impact of higher mortgage rates on the economy and how many households have been taken to breaking point. Rates came down last week but real mortgage rates didn't follow due to concerns around inflation so things could get worse before they get better. There's a belief in some corners that the cost of living crisis is over but it's a mistaken one based on this data."
Simon Bridgland
Mortgage & Equity Release Expert
Director at Release Freedom
"The true scale of the problem is now showing its face, as hard-pressed borrowers are faced with the inevitable consequences of being unable to pay for priority bills. Household budgets have been reeling from the hangover of Covid and employment layoffs, which look set to continue given the extra budgetary pressures SMEs are facing going forward. At the moment these numbers look set to continue as most people don’t have a fairy godmother to wave a wand and make money appear."
Rohit Kohli
Mortgage Expert
Director at The Mortgage Stop
"The recent 56% surge in mortgage possession claims is a stark indicator of the financial strain many homeowners are facing. This increase may be linked to borrowers coming to the end of support measures provided by the Mortgage Charter, which offered temporary relief like switching to interest-only payments for a period of time. As these support periods expire, some borrowers are struggling to meet their original obligations, leading to a spike in possession claims. Meanwhile, landlord possession claims are also up, particularly in London, pointing to the ongoing challenges around rental affordability. Both homeowners and landlords are grappling with significant pressures as market uncertainty continues."
Ben Perks
Mortgage Expert
Managing Director at Orchard Financial Advisers
"The scale of this problem can no longer be ignored by those in government. They want to do so much to help people get onto the housing ladder, but are doing very little to stop people falling off it. Quarter on quarter we are seeing increases in possession claims and, as shocking as these figures are, they are becoming all too familiar. Intervention is needed to help keep the roof over borrowers' heads."
Justin Moy
Mortgage Expert
Managing Director at EHF Mortgages
"There is nothing here to give anyone any good feeling. These worsening trends take a lot to change, and if this is fuelled by higher mortgage payments and increased rental payments, nothing announced by the government is making a blind bit of difference. In fact, quite the opposite since the Budget at the end of last month. Just when you could see the blue sky of improvement, the red sun has set instead, and this won't be a Christmas to remember for many."
Michelle Lawson
Mortgage Expert
Director at Lawson Financial
"This makes for thoroughly bleak reading. Could these figures be showing the inevitability that was delayed by the Mortgage Charter essentially kicking the can down the road? Landlords are stuck in a Court or Bailiff backlog and due to the Section 21 housing rental crisis so for those that aren't being paid rent and can't meet their mortgage payments it leaves them with few options. The sales market also isn't vibrant due to mortgage rate volatility. All in all this is a ticking time bomb."
