Home Repossessions on the Rise as Banks Go Back to Court Against Struggling Homeowners

Following an investigation into the rising number of house repossessions currently taking place, a journalist from the Daily Mail recently reached out to HMS to get a better understanding of the repossession process. Richard Harrison, a senior adviser at HMS, provided his expert assessment of this trend, explaining that most homeowners who are currently facing repossession are those who were struggling before the pandemic. As time goes on, and the economic impact of the pandemic deepens, more and more homeowners will begin to “filter through the courts”.

struggling homeowners forced to sell

A joint probe by Money Mail and the Bureau of Investigative Journalism has revealed that many mortgage holders are currently being taken to court by banks and having their homes repossessed across England and Wales.

The Bureau sent reporters to sit in on possession hearings in 30 courts across two months. At this time, they were able to log the details of 115 mortgage possession cases. They reported:

  • Nearly 50% of the hearings ended in a possession order.
  • A further 30% resulted in a “suspended order”, meaning that they could face eviction if they fell behind on payments.
  • It took an average of nine minutes (8.6) for a possession order to be granted.
  • On average, the homeowner was £7,900 in arrears; however, one person received a suspended possession order when they owed just £670.
  • In 81% of cases, the mortgage holder did not have any legal representation.

With some people being given court orders when only a few hundreds of pounds in arrears, and hearings lasting only nine minutes often without any legal representation for the defendant, it is easy to see why repossessions are already back up to 58% of pre-pandemic figures.

The report also found that COVID-19 was mentioned in nearly a third of the hearings, thus highlighting the deepening economic impact that the pandemic is having on homeowners. Notably, the government stated at the beginning of the COVID crisis that “nobody should lose their home as a result of the pandemic”, words that are proving to come back to haunt them.

The findings also seem to contradict guidance from the Financial Conduct Authority (FCA) that stresses court action should only be used as a “last resort” due to the impact of the pandemic.

The Tip of the Iceberg

Richard Harrison was cited in the Daily Mail article which published the Bureau’s report. He commented: “‘A lot of the people are homeowners who were in financial difficulty before the pandemic. But over the next six to 12 months, we expect to see those whose circumstances changed overnight during lockdown filter through the courts. This is the tip of the iceberg.”

Richard’s assessment of the situation is informed by our own experiences at HMS. For example, several of our clients informed us that they were unaware they had to actively apply for the government’s mortgage holiday scheme. As a result, their arrears continued to grow and many are now facing court action.

Get Help Now

With the safeguards that were put in place during the pandemic being removed from struggling homeowners, repossessions are forecasted to steadily rise in the coming months.

If you are currently facing eviction, contact us immediately so that we can help stop the repossession of your home. Our experienced team at HMS is dedicated to finding a solution to your problem. Click here to get started or call 0808 109 3559 for free advice.