There was a closing in the North-South divide in home repossessions over the past 12 months, according to research from e.surv chartered surveyors.
There were 2.5 repossessions per 1,000 households in the North in the first half of 2014, compared to 1.7 repossessions per 1,000 households in the South, according to e.surv’s analysis of court-ordered repossessions in England & Wales, broken down by post code. This compares to 2.9 repossessions per 1,000 households in the North and 2.0 in the South in H1 2013, meaning the gap has reduced by 16% year-on-year.
Total home repossessions have fallen 14% year-on-year as a result – from 27,105 in H1 2013 to 23,285 in H1 2014. The average rate of repossessions in England & Wales now sits at 2.1 repossessions per 1,000 households, down from 2.4 in H1 2013. Repossessions have fallen in every region of England & Wales.
Despite this, 76% of Northern towns still have a repossession rate above the national average.
“The repossession rift between North and South is beginning to knit itself back together, helped by a jobs boom across the country,” said Richard Sexton, director of e.surv chartered surveyors.
“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 North West and Wales were the hardest hit by court-ordered repossessions in the first half of 2014. 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.
Analysis of the towns with most repossessions reveals that comparatively the North-West is struggling far more: three of the top five towns with the most court ordered repossessions were in this region. North-West town Oldham had the highest rate of repossessions across England & Wales, with 3.7 repossessions per 1,000 households in H1 2014. Nearby Liverpool came in third place with (3.3), closely followed by Wigan in fourth (3.29).
However, where previously those areas worst hit by recession have been predominantly Northern – 8 out of 10 of the top 10 repossession postcodes in 2013 were in the North – Luton (3.3) has found itself on the list, alongside three London postcodes: Romford (3.1), Croydon (3.1) and Ilford (3.0).
Sexton added: “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.”