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UK Housing Repossession Jumps in First Quarter 2009

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By : kath wong    99 or more times read
According to the Council of Mortgage Lenders (CML), repossession in the UK has increased considerably from 8,500 properties in first quarter 2008 to 12,800 in same quarter 2009. This figure has showed a 50% jump in repossession whilst reflecting the situation and effect on homeowners under the economic downturn. Expert has further forecast that the total number of repossessions would increase to 75,000 in 2009; compared to 40,000 properties being repossessed in 2008.

Repossession in Buy-to-let Market

Property repossession in buy-to-let market seems to be affected by the economic recession drastically with 88% increase in number of repossession this year compared to last year. Report shows that 1,700 repossessions took place in the buy-to-let market in the first quarter this year, which was increased from the total of 900 rental properties in the same quarter last year.

Consequently, with a massive increase in repossessions of buy-to-let properties, the number of receiver of rent was appointed to a further 2,400 properties during the first quarter of 2009; which the tenants tried to make rental payment to the lenders instead of the landlords in order to save them from being forced out of the house in a short notice. This figure is also up from 1,800 resulted in the previous quarter.

Besides, under the economic downturn, there is a significant increase in buy-to-let mortgage arrears this year compared with the year before. Report revealed that 3.09% of all buy-to-let mortgages were in arrears in the first quarter of this year; whilst only 0.92% of buy-to-let mortgage arrears were resulted in the same period in 2008. This rise in mortgage arrears reveals that the buy-to- let market is strongly affected by the economic crisis.

It has been, therefore, mentioned that the proposal announced in the Green Paper by the Department of Communities and Local Government this week should be implemented as soon as possible in order to help tenants to face repossessed landlords. In the proposal, the Government suggested that tenants should be given at least two month notice from repossessed landlords before the tenants are required to leave the house.
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