The threat of repossession is a distressing reality for many homeowners and landlords across the UK, and Liverpool is no exception. According to recent data from UK Finance, the number of mortgages in arrears continues to rise, highlighting the ongoing financial challenges faced by many.
The Current State of Mortgage Arrears
In the fourth quarter of 2023, there were 93,680 homeowner mortgages in arrears of 2.5% or more of the outstanding balance, a 7.0% increase from the previous quarter. Of these, 35,940 mortgages were in the lightest arrears band (2.5% to 5% of the outstanding balance), marking a 5.0% rise from the previous quarter.
The buy-to-let sector is also feeling the pressure. There were 13,570 buy-to-let mortgages in arrears of 2.5% or more of the outstanding balance, up by 18% from the previous quarter. Within this group, 6,800 mortgages were in the lightest arrears band, an increase of 8.9%.
Repossession Rates and Trends
Despite the rise in arrears, the number of repossessions remains relatively low. In the fourth quarter of 2023, 540 homeowner mortgaged properties were repossessed, a 14% decrease from the previous quarter. Conversely, 500 buy-to-let mortgaged properties were taken into possession, an 11% increase from the previous quarter.
Overall, mortgages in arrears accounted for 1.07% of all homeowner mortgages and 0.69% of all buy-to-let mortgages in the fourth quarter of 2023.
UK Finance emphasizes that repossession is always a last resort, pursued only after all other options have been explored. The total number of repossessions across buy-to-let and homeowner properties in Q4 2023 was 1,040, significantly lower than the nearly 2,000 repossessions recorded in Q4 2019 before the pandemic.
Expert Insights and Advice
Eric Leenders of UK Finance acknowledges the rising trend in mortgage arrears, attributing it to the ongoing cost of living crisis and high interest rates. He advises those struggling with mortgage payments to contact their lenders as soon as possible. “Lenders have teams of trained experts ready to help. Contacting your lender to find out what support is available won’t affect your credit score,” Leenders reassures.
Patricia McGirr, Chief Marketing Officer at Finanze Group, also highlights the broader financial pressures on households. She notes that while recent interest rate drops are beneficial, the overall cost of living increases continue to impact borrowers. McGirr points out the particularly harsh situation for those with poor credit, who often face the worst deals despite their financial struggles. “Schemes to help tackle financial problems have helped, but there’s a long way to go,” she adds.
What Can You Do?
If you’re facing financial difficulties and the threat of repossession in Liverpool, it’s crucial to act quickly:
- Contact Your Lender: Discuss your situation and explore available support options. Early communication can open up possibilities for loan modifications, payment plans, or temporary relief.
- Seek Professional Advice: Financial advisors and housing charities can provide guidance tailored to your situation.
- Consider Alternative Solutions: Selling your house quickly can be a viable option to avoid repossession. At Liverpool House Buyers, we offer a fast, hassle-free process to help you move on from financial distress. Contact us for a fair offer on your property and take the first step towards financial relief.
Facing financial difficulties and potential repossession is undoubtedly challenging. However, understanding your options and taking proactive steps can help you navigate this tough situation. For those in Liverpool, Liverpool House Buyers is here to assist with a swift and straightforward solution.
