The report highlighted that in the first half of 2014 there were 2.5 repossessions per 1,000 households compared to 1.7 in the South. This is a 16% drop in comparison to last years figures of 2.9 repossessions per 1,000 households in the North and 2.0 in the South.
As a result, total home repossessions have fallen 14% year-on-year, with the average rate of repossessions in England & Wales now standing at 2.1 repossessions per 1,000 households. The report also highlighted that repossessions have fallen in every region of England & Wales.
However, over three quarters (76%) of Northern towns still have a repossession rate above the national average, suggesting the North still has a way to go to catch up.
Richard Sexton, director of e.surv chartered surveyors, explains: “The repossession rift between North and South is beginning to knit itself back together, helped by a jobs boom across the country. People all across England and Wales have a firmer grasp of their finances compared to a year ago and the Bank of England continues to hold interest rates low, which has been a real boon to those who are already on the housing ladder – allowing them the chance to pay down debts whilst accessing cheaper mortgage repayments. At the same time, wage growth has outpaced inflation for the first time in five years, meaning the cost of living squeeze has started to ease.
This really boils down to people having more money in their pockets than a year ago. Savers may have suffered while the base rate has stayed low, but for those on the edge of the repossessions cliff, it has allowed them the respite needed to claw back their finances and move back into financial security.
Moving forwards, the Mortgage Market Review will ensure that future borrowers are able to keep up with repayments, despite fluctuations in interest rates. It’s heartening to see repossession rates falling in those areas which have previously been most deeply affected.”
The hardest hit areas according to the data were the North West and Wales. In total, 86% of towns in the North West had more repossessions than the average in England & Wales (2.1 per 1,000 households), while the same was true for 80% of Welsh towns.
Richard Sexton, commented: “The North West remains the repossessions capital of England and Wales, with nine out of ten towns home to more repossessions than average. Even though home-owners in the North have made wide strides towards financial fortitude over the last year, there still remain many pockets where homeowners are struggling to get back on their feet after being knocked backwards by the financial crisis. The North West was hit hard by recession-driven public-sector job cuts in particular, and many towns have been slower to wake from the slumber of the crisis as a result.”
Some of the Northern cities that have struggled the most with repossessions have seen the fastest improvements. Blackpool, for example, had the second highest repossession rate across England and Wales in 2013 – now it’s speeding down the rankings, leaving even a few struggling areas of London dazed in its wake.”
London improves more slowly than the rest of England & Wales – on par with Wales
There were 2.1 repossessions per 1,000 households in the capital in H1 2014, exactly the same as the average across England & Wales. However, London contains some of the worst and best areas in terms of both repossession rates and year-on-year improvements.
In the Greater London town of Romford – the seventh worst postcode area for repossessions in England & Wales – there were 3.12 repossessions per 1,000 households in H1 2014. Meanwhile Croydon was the eighth worst postcode area for repossessions (3.1). At the other end of the spectrum, West-Central London (0.4) and West London (0.9) have not only the lowest rates of repossession in London, but also the lowest across England & Wales.
Richard Sexton, concluded: “London, as ever, is something of a law unto itself. A closer look at rates of improvement in Romford, for example, reveals that their proportion of repossessed houses might be among the worst, but their rates of improvement are nearly 50% higher than average. The ever-present problem of housing shortages in London keeps crowds of buyers hovering around the outskirts and desperately trying to keep up with mortgage repayments. It’s not enough to glance at averages when dealing with any region, and London is a case in point: it might match the UK average for repossession rates per 1,000 households, but this figure conceals the suburban towns struggling to get by – and the towns bravely tackling problem.”
