Banks have stepped up their efforts to seize homes from borrowers struggling to keep up with monthly payments.
Households in trouble include the many thousands coming off cheap fixed-rate mortgages taken out two years ago who are now being hit with big increases in payments when remortgaging.
At the same time there is a group of “mortgage prisoners” who are losing the roof over their heads.
These people were moved to new finance companies charging interest rates of more than 9 percent when their lenders collapsed during the 2008 financial crisis.
New Ministry of Justice figures show the number of mortgage possession claims leapt by more than a third to 5,343 in the three months to the end of June. This is the highest level since 2019.
Landlord repossessions increased by 9 percent year-on-year to 24,495 as private and social tenants struggled to keep up with paying the rent.
The figures show that efforts by lenders to gain possession of homes are becoming more successful, with the volume of repossessions by bailiffs up by 29 per cent to 854 from 660. Warrants increased by 9 per cent to 2,918 from 2,679.
Despite the increases, housing repossession claims are still well below the peak reached following the global financial crisis. A figure of 26,419 was recorded in the second quarter of 2009.
Banks file a mortgage possession claim to start the process of gaining ownership of the property that underpins a mortgage. These proceedings involve homeowners being taken to court to establish whether the lender can claim the asset.
Patricia McGirr, Founder at Repossession Rescue Network, told Newspage: “A significant number of UK borrowers have hit a financial iceberg over the past few years and, sadly, there aren’t enough lifeboats for those that have gone overboard.
“If people already struggling with historically low interest rates couldn’t keep afloat before, they’re certainly going to feel the icy waters when they remortgage.
“Although rates have dropped a little recently, we need a more joined up approach to mortgage arrears and alternatives to repossession. I shudder at the mental health crises that lie behind these figures.”
Chris Sykes, senior mortgage consultant at Private Finance, a mortgage broker, said: “With the costs of living only growing, even if inflation is now only at 2 per cent, and mortgage and rent costs higher than many are used to, it is no surprise that possessions have grown.”
Last month, money saving expert Martin Lewis renewed his call for the government to step in and help 200,000 mortgage prisoners who are trapped on high rates and are at most risk of losing their homes.
The UK Mortgage Prisoners Action Group (UKMP Action Group) has called for the government to take “urgent action” to protect mortgage prisoners and to “curb the tsunami of repossessions and forced sales it is seeing”.
It has requested an early meeting with Treasury ministers amid claims the mortgage prisoner scandal is “at crisis point”.
The group has called for an immediate halt to repossession actions due to arrears for mortgage prisoners trapped on interest rates of 9 percent and more for an initial period of six months to allow for time to work through solutions with the new government.
The mortgage prisoners group action was launched in July 2022 by customers who claim they were locked into mortgages with “excessively high” interest rates.
