As high interest rates lead to home repossessions, London will be hit hardest

As high interest rates lead to home repossessions, London will be hit hardest

Along with unemployment, home repossession is probably the most distressing symptom of recession.

We still do not know if the country was officially in recession at the back end of last year — for that we have to wait for the puff of white smoke from the ONS next week.

But the scourge of repossession is almost certain to rise, with London worst affected, whatever the GDP number crunchers come up with. According to government figures published today, banks and building societies initiated 4,384 mortgage possession claims in the last quarter of 2023.

That is up 39% on the same period in 2022.

It takes about a year for the process to play out, from a claim being lodged with the county court, to owners having to hand the keys over the bailiffs. So legal proceedings started last autumn will not result in people being turfed out for many months yet.

Hopefully lenders will be able to agree repayment terms that allow owners to keep the roof over their heads, at least in some cases.

Landlord possessions are a much quicker process, typically only taking around six months. Today’s figures show landlord possession claims up 14% at 23,382 during the quarter, while actual repossessions were 23% higher at 6.649.

We are not yet back at the levels of claims seen before the pandemic, let alone after the financial crisis, or God forbid, during the Nineties property crash. But they are steadily rising — and London is on the front-line.

The highest rate of mortgage possession claims in the UK were seen in Westminster, followed by Kensington & Chelsea and Brent. For private landlord possessions, Barking & Dagenham had the highest rate of claims of any local authority area, and seven out of the top 10 were in the capital.

There has been so much talk of rate cuts that you have to remind yourself sometimes that the Bank of England continues to stay its hand at 5.25%.

Today’s figures show that for increasing numbers of people that is too much of a burden to bear.

Jerry David is a seasoned Senior Reporter specializing in consumer tech for BritishMags. He keeps a keen eye on the latest developments in the gadget arena, with a focus on major players like Apple, Samsung, Google, Amazon, and Sony, among others. Jerry David is often found testing and playing with the newest tech innovations. His portfolio includes informative how-to guides, product comparisons, and top picks. Before joining BritishMags, Jerry David served as the Senior Editor for Technology and E-Commerce at The Arena Group. He also held the role of Tech and Electronics Editor at CNN Underscored, where he launched the Gadgets vertical. Jerry David tech journey began as an Associate Tech Writer at Mashable, and he later founded NJTechReviews in 2010. A proud native of New Jersey, Jerry David earned his Bachelor of Arts in Media & Communication with honors, minoring in Innovation and Entrepreneurship from Muhlenberg College. Outside of work, he enjoys listening to Bruce Springsteen, indulging in Marvel and Star Wars content, and spending time with his family dogs, Georgia and Charlie.