Repossession and Reality: Stop Repossession Today

The UK’s financial stress and end of the mortgage payment holiday

MoneySupermarket’s recent research into financial stress has revealed that a large proportion of the British public fear repossession or eviction. Customers were invited to rate financial events on a scale of 1 to 10 regarding how stressful they found each event. Ranking second-most stressful financial event, repossession and eviction scored an average of 7.7 out of 10. The survey specified that repossessions or evictions, in this context, were solely due to the individual’s inability to fulfil their rental or mortgage commitments.

Coming in at third place, with 7.5 out of 10, was anxiety surrounding the need to pay a mortgage or rental on time. As two of the most stressful financial events encountered by MoneySupermarket’s customers, the threat of repossession appears at the forefront of the British public’s concerns. Indeed, the study continued to reveal that 39% of their sample found discussion of their finances induced stress while, for 52%, just thinking about their finances triggered anxious reactions.

Those with money troubles often note feeling lonely, isolated or detached from their social circles. However, MoneySupermarket’s latest research demonstrates that such difficulties occur far more frequently than perhaps assumed.

Professor Mark Fenton-O’Creevy of The Open University, said: ‘Our research shows that many of us are more worried about our finances than we might expect – something that has been made worse by the extraordinary times we’re living through.’ He continued, ‘Our survey and previous research shows that people who see money as a source of security and protection from unexpected events are less likely to get into financial difficulties than those who see it is power and status, as a source of expressing freedom, or as a way of expressing love.’

The grim reality of the mortgage break

This news appeared shortly after the conclusion of the UK Government’s mortgage payment holiday scheme. Culminating on 31 March 2021, the scheme supported borrowers by allowing them to pause repayments twice for a total of 6 months combined. House repossessions were also suspended during this period. These changes aimed to support people struggling financially as a result of the current pandemic. Because of this, banks were not required to undertake usual affordability checks and all payment holiday requests were self-certified by homeowners.

Research from UK Finance shows that banks sanctioned 2.7 million mortgage payment holidays before 31 March and have been advised to offer ‘tailored support’ to those who have not taken a payment holiday and are struggling to make future payments.

Whilst several companies have reassured homeowners of the scheme’s inability to their affect overall credit scores, there is some confusion over the scheme’s long-term impacts.

Gareth Shaw, Head of Money, at which.co.uk writes a weekly column for the i newspaper and recently considered the future impacts of the mortgage payment holiday scheme. He said, ‘while [the scheme] should never affect your credit score, a deferral can be used to inform a lender’s decision to lend you money in the future.’

He continues, ‘[Lenders] may see that you took out a payment holiday and decide that you are the type of customer it does not want to lend to in the future. We don’t know how much of an issue this is now, but it is worth understanding the full implications of the mortgage payment holiday scheme.’

This news was published after 2.7 million payment holidays had been confirmed. Such information, combined with MoneySupermarket’s research, will only exacerbate financial stress for those who partook in the scheme. At a time when stress is higher than usual, concerns around mortgages, repossession and eviction have spiked. Whilst, perhaps, not the comforting news we hoped to hear, there is a sense that those in financial difficulty are not alone or stranded without aid.

Stop repossession and eviction today, it is never too late.  Click here to get started  or call 0800 298 0571