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Pandemic property repossessions on the rise

Despite record house price highs and huge levels of buyer demand, since the start of the pandemic 4,320 homes have been repossessed across England and Wales. A fifth of those have been in the North West, according to newly released data from YesHomebuyers.

With the current stamp duty holiday spurring a property market frenzy, house prices have boomed. The latest UK House Price Index shows that the North of England is leading the way, with both the North West (11.9%) and Yorkshire and Humber (10.9%) registering the highest rates of annual growth, while the North East (9%) isn’t far behind.

However, research from the homebuying platform, highlights that the North of England has seen by far the most property repossessions since the start of the pandemic, with the North West, in particular, home to the highest level.

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Property repossessions are executed by a lender, usually the bank or building society when the owner of a property fails to make the interest payments on any debt secured against their home.

Most repossessions by region

The North West has seen the highest number of repossessions during the pandemic, accounting for 20% of the total number seen across England and Wales. The North East has also seen a large number of repossessions, accounting for 16% of the national total, while Yorkshire and the Humber rank third at 14%.

Collectively, the North of England has accounted for 50% of all property repossessions seen across England and Wales during the pandemic. In contrast, the East of England has accounted for just 2% of pandemic repossessions, with the South West (6%) and East Midlands (7%) also seeing a low proportion.

The property price cost of a repossession

Traditionally, having your property repossessed would mean it selling on the open market for a far lower price. However, since the government bailed out the big lenders in the wake of the 2008 Credit Crunch, they have been under far greater pressure to prove that they have ‘Treated the Customer Fairly’ (TCF) by achieving the best price possible

Figures show that this price achieved varies across the country but on average, repossessed homes in England sell for around 77% of market value. Although they can regularly achieve as high as 95% of market value, according to founder Matthew Cooper, who previously worked managing repossessed homes for a number of lenders.

Matthew Cooper, Founder & Managing Director of Yes Homebuyers, commented: “The repossession of a home can be a very traumatic experience and although new guidelines are in place to ensure the lender achieves the highest price possible, it’s the last thing any homeowner wants to go through.

“Contrary to popular belief, home sellers in financial distress account for a very small percentage of those opting to use a quick sale platform such as Yes Homebuyers. While it does provide greater speed when transacting, as well as allowing the homeowner to maintain control of their sale, we actively advise against it if there is a more favourable option available.

“Opting for our services should really be the last resort and our advice to any homeowner is to be proactive and get your property on the market at a realistic price. Always, always communicate with the lender to let them know you’re doing everything possible and try and buy the time to get a normal sale done for the best price possible. This will put you in the best possible position to get a handle on any debt you owe, while providing the best possible foundations to move forward.”


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The North West is a repossession hotspot

There were 1,464 repossessions in the North West in the past 12 months, the most of any region, research from home buying platform Yes Homebuyers has found.

The North East (1,044) and Yorkshire and the Humber (1,029) also rank high with over 1,000 properties being repossessed in the last year.

In contrast, just 162 homes have been repossessed in the East of England in the last year, the lowest of all regions. The South West (439) and East Midlands (505) have also seen some of the lowest levels of homes repossessed.

Matthew Cooper, founder and managing director of Yes Homebuyers, said: “Falling behind financially and having to sell your home to cover outstanding debts is perhaps the hardest decision you will ever have to make. As a result, many of us fail to act and eventually face repossession of the property as a result.

“The real sting in the tail is that this often incurs more costs and the value of your home is significantly reduced during the repossession sale process. This means far less of your debt is covered compared to selling in the regular market.

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“Homebuying platforms can offer a lifeline in these situations, allowing those in financial hardship to sell quickly in order to pay off their outstanding finances while maintaining the final say in the sale of their hard-earned bricks and mortar asset.

“Luckily, only a small segment of those we see selling via Yes Homebuyer are doing so out of financial desperation. However, for those that find themselves with little other choice, we can provide a higher offer than they would see via a repossession sale and we can also complete in a very short time period so that they receive the funds quickly.”

The real salt in the wound of a property repossession is the price the property sells for, with those seeing their homes repossessed sold for far lower than they may otherwise have secured by selling themselves.

In this respect, Wales is the worst region to have a home repossessed with the average repossession selling for just £86,859; just 50% of the current average house price.

The East Midlands isn’t much better, with repossessed properties selling for just 55% of current market value, with the North East (60%), Yorkshire and the Humber (62%) and South East (68%) also seeing repossessed properties selling for less than 70% of market value.


Source: Property Wire

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Tenants face evictions as repossession claims lodged

Weymouth and Portland’s county court saw seven property repossession claims lodged by landlords or mortgage lenders during the coronavirus lockdown despite the evictions ban, figures show.

Housing campaigners ACORN called for the ban on new evictions from social and private housing to be extended, warning thousands across England and Wales will be at risk of homelessness when it is lifted.

Though bailiff and eviction activities were paused as part of the ban, claimants have still been able to lodge property possession claims ahead of court eviction cases resuming.

Ministry of Justice data shows seven claims were submitted to the Weymouth County Court between April and June.

All claims were from private and social landlords, with none from mortgage lenders.

There were significantly fewer claims made this year than during the same period in 2019, when there were 73.

This reflected the trend across England and Wales, where the number of possession claims made between April and June fell to 3,183 – a drop of 90%.

Campaign group ACORN is calling on the Government to urgently extend protections for all, including those behind on their mortgage payments.

Mortgage payment holidays, first introduced in March, are also set to end on October 31.

Tom Renhard, ACORN national chair, said: “One person at risk of homelessness is still one too many and the latest figures show thousands of people at risk.

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“This is likely to spike as the furlough scheme comes to an end and many more people may struggle to pay their bills.

“We are in the middle of a public health emergency and people being made homeless could increase the risk of Covid-19 cases.”

Landlords in England must also give tenants six months’ notice before they evict them, a new protection which will last until March 2021.

But tenants involved in the most serious cases, such as anti-social behaviour or those with over six months’ accumulated rent arrears, can be given just four weeks’ notice.

Homeless charity Crisis said the figures confirm banning evictions and extending the notice period was the right thing to do.

Jon Sparkes, Crisis chief executive, said: “As jobs cuts are coming in thick and fast, we know that tens of thousands of people may struggle to find somewhere cheaper to live even with six months’ notice.

“The Government still has time to intervene and protect people from being swept into homelessness. We urgently need renters who are struggling to afford their rent and in arrears given financial support from Government.”

Total county court claims across England and Wales between April and June fell by 75% year-on-year to 118,000, which the MoJ said was linked to measures taken to reduce the spread of Covid-19.

In Weymouth and Portland, claims fell from 104 in 2019 to 20 this year.

A Ministry of Housing, Communities and Local Government spokeswoman said: “We’ve taken unprecedented action to support renters, preventing people getting into financial hardship and helping businesses to pay salaries – meaning no tenants have been forced from their home.

“These measures strike a fair balance – supporting landlords to act in the most serious cases while keeping the public safe.”

By Ellie Maslin

Source: Dorset Echo

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