Northern Ireland is expected to have the highest repossession rate for 2014, standing at 0.82% – this represents 2,606 properties, while Greater London is forecast as having the second highest repossession rate in 2014, at 0.33%. This represents 2,993 properties.
There will be approximately 25,057 repossessions in 2014, according to HML’s latest regional repossession forecast, the only one in the UK to break down repossessions by region.
The UK and Ireland’s leading third-party mortgage administration company’s forecast comes amid yesterday’s Council of Mortgage Lenders' report that last year’s 28,900 repossessions represented 0.26% of outstanding mortgages.
Damian Riley, director of business intelligence at HML, said:
“It is positive that we expect repossessions to decline by 13% to around 25,000. This could reflect an improving economy, with the unemployment rate standing at 7.1% and house prices rising. However, this could also be a double-edged sword for mortgage customers.
“On the one hand, the economy is showing signs of improvement, but on the other, higher levels of free equity where the borrower is in arrears and cannot make mortgage payments could potentially have an influence on the lender’s decision to repossess. Inflation may have fallen to the Bank of England’s two% target, but wage growth stands at less than one%. Household finances are still going backwards, albeit at a slower pace.
“In some cases, lenders may want to give customers breathing space as they find their feet during the recovery. The question needs to be asked whether lenders will become tougher during 2014 as property prices climb amid ‘perceived’ improving household finances. If this scenario happens, repossessions could actually be higher than we have forecast.
“HML’s advice remains the same; customers with concerns about their mortgage payments need to speak to their lender as soon as possible. This means you are more likely to find a solution that satisfies both you and your lender and the less likely you are to be repossessed.”
