15 Feb AS REPOSSESSIONS SOAR, EXPERT OFFERS HIS ADVICE ON HOW BEST TO MANAGE THE SITUATION IF IT OCCURS
REPOSSESSIONS are not heading for the levels seen during the 2008 crash, a property expert who deals with the issue has said.
New figures reveal repossessions doubled in the last three months of 2022, raising fears more mortgage holders could lose their homes.
The data released by the Ministry of Justice showed repossessions by county court bailiffs across England and Wales rose from 313 to 733 between October and December last year – a spike of 134 per cent.
At the same time the figures showed a similar trend for tenants with landlord repossessions jumping from 2,729 to 5,409 – a rise of 98 per cent.
But despite the rising levels Jonathan Rolande, from property firm House Buy Fast, who specialise in supporting people who face losing their home, said: “Despite these stark figures there are reasons to be more hopeful we’re not returning to the bad old days of mass repossession which we saw in 1991 and 2008. Given the combined effects of a pandemic, rate hikes, the cost of living crisis and more, it is surprising repossessions in 2022 were not far higher.
“Each is a personal tragedy for the homeowner who’s dream to own a property has ended in loss and failure.
“But when you compare the current figures to the 40,000 of the 2008 crash and the 75,000 seen in 1991, it is clear the misery could be far more widespread.”
Explaining why he believes the figures will not spiral to the level seen in the past he continued: “A more cautious approach to lending has helped enormously – homeowners now hold a much higher financial stake in their home and will be less likely to walk away. This gives confidence to lenders who have been more tolerant of late or missed payments.
“Thanks to the rise in prices, buyers have also become older, the average is now 37. This means they are more likely to be financially stable and may have already received inherited money. In any event, the spike in prices has allowed older relatives to assist offspring using equity release for example.
“The opening up of the economy, thanks largely to the advent of the internet has made it easier for people to boost their incomes to keep up with payments. The Internet has also led to an explosion of companies that guarantee to buy any property.
“I remember the previous recessions clearly, there were no companies that would buy an unwanted home in a fast and professional way with guarantees. At the time I was a young estate agent and it was really upsetting to see people repossessed because a buyer didn’t follow through with a purchase. Sometimes this was because they couldn’t raise the money needed or infuriatingly, sometimes they just changed their mind and left the seller high and dry.”
The National Association of Property Buyers purchase about £1.5bn worth every year – that equates to around 10,000 homes.
Their recent research indicates that 10% of sellers are currently ‘financially distressed’ which is potentially 1000 owners saved from repossession.
Breakout: What you can do…
Thankfully, anyone in that position now has many more options. Jonathan advises:
*They should speak to their lender who will likely be sympathetic and will try to work out a payment plan to avoid repossession.
*Auctions work well for a quick sale but aren’t guaranteed and can incur costs. If considering a quick sale company I’d urge sellers to consider other options first as prices paid will be lower than full market value but there are clear benefits if the circumstances are right.
*Only use an officially recognised organisation member like the NAPB as they will abide by a strict Code of Practice and a redress scheme in case anything goes wrong.”
*Pay whatever you can, even if it not the full amount, it will show good intentions
*Try to make savings on other spending where you can and add this to the payments.
*Aim to boost your income if possible – a surprising amount of casual work is available in person or online, much of it might fit around other commitments
*If you’re able, rent a spare room – you can get up to £7500 tax free, that could be an extra £625 a month towards your mortgage
