The number of homes being repossessed fell to a record low in the second quarter of this year.
The Ministry of Justice attributed the “unprecedentedly low levels” of possessions to measures introduced to help homeowners weather the coronavirus pandemic.
No homes were repossessed in the three months to the end of June, according to the MOJ. The number of mortgage orders for possessions is down 96% to 149, and mortgage possession claims were down 97% to 161.
The steep fall in repossession activity was seen for both owner-occupied properties and those belonging to landlords, with landlord possession actions dropping by 89%.
Why is this happening?
Shortly after the UK first entered lockdown in March, a number of measures were introduced to enable people to stay in their homes even if their incomes were hit by the Covid-19 pandemic.
The Financial Conduct Authority said homeowners and landlords could apply for a three-month mortgage payment holiday, and it was later announced that this could be extended for a further three months.
The government also passed the Coronavirus Act, which put a temporary halt on all repossession activity, initially for three months, and later until 23 August this year.
Landlords were also not allowed to start eviction proceedings against tenants for three months, even if they were behind with their rent.
Who does it affect?
The latest figures show that a total of two million homeowners and landlords applied for a mortgage payment holiday since the initiative was first launched.
But repossession figures are expected to start increasing again once the support measures are removed.
In fact, although there is currently a block on repossessions, nine possession warrants against homeowners and 268 against landlords were still issued during the second quarter.
What should I do if my mortgage payment holiday is ending?
If you are coming to the end of a mortgage payment holiday and are worried you won’t be able to resume full payments, the most important thing to do is talk to your lender.
Mortgage lenders have made it clear they will be sympathetic towards homeowners whose finances have been affected by the pandemic and will explore a range of options with them to find the best one for each individual.
Among the solutions lenders can offer you is an extension to your current repayment holiday for another three months.
They may also agree to accept reduced repayments for a period of time or switch you over to an interest-only mortgage, which would significantly lower your monthly payments.
Another option is to extend your mortgage term, as doing so would also make your monthly repayments smaller.
Despite the flexibility lenders are showing, trade body UK Finance has urged homeowners who can afford to resume full mortgage payments to do so.
Top three takeaways
- The number of homes being repossessed fell to a record low in the second quarter
- The Ministry of Justice said no homes were repossessed in the three months to the end of June
- It attributed the “unprecedentedly low levels” of possession activity to the measures introduced to help homeowners weather the coronavirus pandemic.