North-South repossession gap shrinks by 80%

According to the latest from e.surv, the North South repossession gap has shrunk by 80% since the recession.

Related topics:  Property
Warren Lewis
4th December 2015
Black Houses

According to the report, on average, there were 1.1 repossessions per 1,000 households in the North in the first half of 2015 compared to 0.7 in the South.

By comparison, in 2008 repossession rates stood at 8.2 per 1,000 households in the North and 5.9 in the South, a difference of 2.3.

On a yearly basis (since H1 2014) the North-South divide has narrowed 43%. In H1 2014 there were 2.4 repossessions per 1,000 households in the North, in contrast to 1.7 in the South, with a difference of 0.7 – meaning the gap closed at a faster pace over the last year than in previous years.

Despite these improvements, the North is failing to match this average rate across England & Wales, with almost eight out of ten towns in the regions seeing a higher than average repossession rate.

Richard Sexton, director of e.surv chartered surveyors, said: “Over the last year, the North-South gap has been narrowing at an accelerated pace. Fewer people are battling unemployment and against this optimistic backdrop, finances are being bolstered across England and Wales by delayed interest rate increases. Rising wages and negative inflation are making living costs more affordable, giving people room to save. But these economic changes are also having a real impact on those feeling the strain and potentially facing repossession. A healthier lending market is enabling people to search for cheaper mortgage options and regulatory changes, such as MMR, are making a real difference in protecting borrowers from committing to potentially unaffordable mortgages in the first place.”

Since the first half of 2014, Bolton has featured in the top ten worst repossession postcodes. Despite the town seeing a reduction in its repossession rate year-on-year to 2.0 in the first half of 2015 from 2.8 per 1,000 households in the first half of 2014, it still has emerged as the town with the highest incidence. Within the bottom five, Oldham (1.6 per 1,000), Liverpool (1.6 per 1,000) and Manchester (1.5 per 1,000) all also featured from the North West – and are all battling high unemployment rates.

By region, the North East saw the highest rate of court-ordered repossessions across the first half of 2015, with 1.3 repossessions per 1,000 households, just ahead of the North West.

London has left behind its prior slow progress concerning repossession rates and has managed to record a significant improvement. The city saw repossession rates tumble by 59% year-on-year since the first half of 2014.

Despite this, London continues to incorporate great variation when it comes to repossessions. East-Central London ranked as the best Greater London postcode area for repossessions – boasting a rate of just 0.3 per 1,000 households, down 75% year-on-year. In contrast, Ilford became the seventh worst postcode area for repossessions in England & Wales (1.5), narrowly beating Romford (1.4) – however both areas improved since H1 2014.

Richard Sexton added: “There are still some pockets where repossessions are a very real problem. Despite a narrowing divide, the North retains its unenviable position over the South for repossessions, with eight out of ten towns in the region still seeing an above average level of repossessions. Economic and jobs progress has been made in the North – promises of a Northern Powerhouse have created a renewed confidence within the area’s jobs market. However, in former industrial hubs like Sunderland and Bolton, homeowners are still finding it difficult to make ends meet. Public sector jobs cut in the recession have not been reinstated or fully replaced by new opportunities, leaving areas heavily reliant on this sector grappling for more jobs and more economic help.”

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