Why home repossessions are at a record low
Why are home repossessions at a record low?
The number of houses being repossessed by banks plummeted to a record low in the second quarter of this year, according to Zoopla.
The Ministry of Justice (MoJ) said the “unprecedentedly low levels” of possessions were due to government measures introduced to help homeowners by forcing lenders to offer mortgage holidays during the coronavirus pandemic.
The were no homes repossessed in the three months from April until the end of June, according to the MOJ. The number of mortgage orders for possessions dropped by 96% to just 149. Mortgage possession claims fell by 97% to 161.
Landlord possession claims also fell by 89%.
The government introduced a number of measures to enable people to stay in their homes even if their incomes were hit by the Covid-19 pandemic after the UK first entered lockdown in March.
The Financial Conduct Authority (FCA) advised homeowners and landlords in difficulty to apply for a three-month mortgage payment holiday.
The government passed the Coronavirus Act, which put a temporary halt on all repossession activity, initially for three months, and later until 23 August this year. The government extended the ban on landlords evicting tenants on Friday, two days before it was due to end.
Landlords are unable to start eviction proceedings against tenants even if they are anti-social or in arrears their rent.
Figures reveal that two million homeowners and landlords applied for a mortgage payment holiday since the initiative was first launched.
Repossessions and tenant evictions will resume in large numbers once support measures come to an end, but there will be huge backlogs and long delays in enforcing court orders.
A tenant could probably get away without paying rent for another year before an eviction took place.
If your mortgage payment holiday is coming to an end and are worried about paying your mortgage you should talk to your lender and avoid burying your head in the sand. Open those letters!
In theory, lenders can voluntarily offer repayment holidays for a limited period and could accept reduced repayments or switch you over to an interest-only mortgage, which would substantially cut your monthly payments.
You could ask your lender to extend your mortgage term, which can make your monthly repayments smaller, although the total amount repaid over the term would increase.
Low interest rates have prevented hundreds of thousands of mortgage borrowers from losing their homes since the last financial crisis. In the previous four recessions, interest rates shot up to record levels and repossessions and bankruptcies went through the roof.
The trade body, UK Finance, has urged homeowners to resume full mortgage payments if they can afford to do so, and you don’t really want mortgage arrears on appearing your credit file.
Despite all the measures, homelessness has not been eliminated by a long shot. I was in central London last night and I was shocked to see the number of people sleeping rough in doorways and on the streets. I have seen this before, but not on this scale.
- Number of homes repossessed falls to record low
- Mortgage possession claims fell by 97% to just 161
- 2m homeowners apply for mortgage payment holiday
- Government extends ban on landlords evicting tenants
- Unemployment to double 7.5% and economy slump 9.5%
- Self-employed, have you claimed your government grant?
- Lenders not passing on rate cuts and mortgage rates going up!
- UK property prices jumped by 3% since June following stamp duty cut
- Why UK Property prices rising after stamp duty cut, despite the downturn?
- New planning rules will open up more opportunities to make money in property
- You can create a second income during the lockdown…and come out stronger
- Learn how to make money from property without deposits, mortgages or cash
Millions of people face a bleak future post-Coronavirus lockdown, as businesses disappear and the job furlough scheme eventually comes to an end. However, life doesn’t have to end because of lockdown! You can join thousands of ordinary people who have increased their income and added streams of new income during this period.
Are you ready to adapt to the new economic model?
As lockdown restrictions around the world are being eased, the economic model has subtly changed forever. How will you adapt to this new way of working and running a business, what obstacles and opportunities lies ahead? Will you be a participant or spectator in this revolution?
By Charles Kelly, Property Investor, Author of Yes, Money Can Buy You Happiness and creator of Money Tips Podcast.
There are more examples and practical steps to getting rich and being happy in my book, Yes, money can buy happiness, I cover the 3 R’s of Money Management, the Money B.E.L.I.E.F System and much more. Check it out on Amazon http://bit.ly/2MoneyBook.
If you’d like further information on how to survive the crisis and even quit the rat race, email me at Charles@CharlesKelly.net or send me a message through Facebook or my Money Tips Daily community. See more articles at www.moneytipsdaily.com