The number of people evicted from rental accommodation last year was 42,728, the highest since records began in 2000, the latest Ministry of Justice figures show. The data revealed that the number of tenants who were evicted has gone up 53% since 2010, the equivalent of over 250 people losing their home each day. In the […]
The number of people evicted from rental accommodation last year was 42,728, the highest since records began in 2000, the latest Ministry of Justice figures show.
The data revealed that the number of tenants who were evicted has gone up 53% since 2010, the equivalent of over 250 people losing their home each day.
In the final quarter, there were 9,775 repossessions by county court bailiffs, down 6% on the same quarter last year.
Shelter’s chief executive, Campbell Robb, said the figures were clear proof of the “devastating impact” that welfare cuts and the chronic shortage of affordable homes were having on renters.
“Shelter is here to support the families behind these numbers who’ve lost the fight to stay in their home, and worryingly we know there are thousands more living in constant fear that just one thing, like a cut in hours, could leave them homeless.
“Successive governments have failed to build enough genuinely affordable homes, and short-sighted welfare cuts are only making things tougher. The only way to fix this crisis for good is for the government to commit to building homes that people on ordinary incomes can actually afford to rent or buy.”
Mortgage repossessions
Separate figures from the Council of Mortgage Lenders show that the total number of repossessions in 2015 was 10,200, less than half the number in 2014.
There was around one repossession per 2,500 mortgages in the buy-to-let market in the fourth quarter, compared with one in 5,000 in the homeowner market.
CML director general, Paul Smee, said: “Of course it is good news that the levels of mortgage arrears and repossessions remain low and falling. But, at the risk of sounding as if we are crying wolf, we would continue to urge all borrowers to plan ahead for a time when the interest rate environment may be less benevolent. Lenders do not wish to see borrowers who are coping currently falling into difficulty if and when rates do eventually rise.”
There has been a steady fall in mortgage repossessions since 2008, coinciding with lower interest rates and a proactive approach from lenders in managing borrowers in financial difficulty.
Interest rates have been at a record low of 0.5% since 2009. Following the Bank of England’s decision to keep interest rates on hold, most economists have forecast that there will not be a rise until 2017 at the earliest.
Jonathan Harris, director of mortgage broker Anderson Harris, said: “There is no room for complacency. There are still many homeowners being repossessed or finding themselves in arrears on their mortgage each year, which begs the question: what will happen when interest rates start to rise? How will people cope? We suspect that when it comes to their finances there are many people teetering on a knife edge and rate rises could easily push them over.
“While it looks highly unlikely that interest rates will rise anytime soon, borrowers still need to plan ahead and consider how they would cope with higher mortgage rates. For those who would struggle to pay their mortgage were interest rates to rise, a fixed rate makes a lot of sense, and there are some excellent deals available.
“It is vital that borrowers keep their lender in the loop if they are struggling with their mortgage. It is much easier and less stressful to come up with solutions early on than further down the line when the options may be much more limited.”
During mid-2015, the Bank of England was talking up the prospect of a rise due to a tightening labour market. Ian McCafferty broke MPC ranks and voted for a hike in August. The the growth and inflation forecasts dropped and global factors put an end to the pseudo-hawkishness.
The MPC is once again unanimous. Markets are predicting a rate rise in 2017, up from mid-2016, and early 2016 before that, and so on. The EIU thinks that rates will stay low until 2020, and MPC members such as Andy Haldane and Gertjan Vlieghe are even talking about cutting rates.
Nevertheless, the majority of our clients are opting to fix; down from a high of 8 out of 10 in Q3 2015 to just over 7 out of 10 today. Evidently borrowers opt for security in the majority of cases.
But Mr Smee is correct; whatever the current forecast for rates, it is always sensible to look to the future and stress-test your payments, whether for a home or an investment, to ensure that you could continue meeting them in the event of a hike.