The Bank of England’s decision to increase interest rates again could lead to a further hike in repossessions as an increasing number of households struggle amid significantly higher mortgage costs.
There were 3,680 mortgage repossessions between July and September last year, up 30% on the same period in 2021, the latest government figures show, and this could be a sign of an emerging trend in the market, as more homeowners fall behind on their monthly mortgage payments as a result of consecutive interest rates.
The Financial Conduct Authority warned last month that as many as 750,000 households in the UK are at risk of defaulting on their mortgage at some point over the next two years.
Myron Jobson, personal finance analyst at Interactive Investor, told i that households are facing “unprecedented costs from all sides” meaning “the stark reality is there could be an increase in the number of people losing their homes as they fall into arrears”.
Karen Noye, mortgage expert at Quilter, added: “Increases in the Bank of England’s base rate will make mortgages more unaffordable and if someone goes into arrears with their mortgage they run the real risk of their home being repossessed.”
