Spike in landlord possessions as interest rates soar

Recent data from the Ministry of Justice highlights a troubling increase in possession claims across the UK, with landlords feeling the pinch from rising interest rates.

Rising Pressures on Landlords and Homeowners
In the first quarter of 2024, landlord possession claims saw a 6% rise from the previous year, reaching 24,874 cases. Similarly, orders for possession increased by 3% to 18,154, with warrants and repossessions also experiencing rises of 9% and 6% respectively. Owner-occupier mortgage possession claims have shown even steeper increases, with claims jumping 28% to 5,182 and orders up 19% to 3,019.

Regional Disparities and Time Delays
The data reveals a concentration of private landlord claims in London, where the highest rates are recorded. The process from claim to landlord repossession now takes an average of 24.1 weeks, an increase from the previous year. Conversely, the time from claim to owner-occupier mortgage repossession has decreased to 45.7 weeks, showing some improvement in processing times for homeowners compared to renters.

Calls for Government Action
The rising figures have elicited concern from various sectors. Law Society president Nick Emmerson expressed worries about the potential for increased homelessness, stating, “With the cost-of-living crisis and high interest rates, many are struggling with rent and mortgage payments and are at risk of losing their homes.” He also highlighted the inadequacies in legal aid for housing, which could exacerbate the situation.

Polly Neate, CEO of Shelter, criticised the government’s handling of the situation, particularly its impact on private renters: “Evictions are rocketing to new heights whilst this government has put the threats of a small group of self-interested landlord backbenchers over the safety and security of 11 million private renters.” Neate urged the Lords to make significant amendments to the Renters Reform Bill to provide better protection and stability for renters.

These developments signal a critical time for housing in the UK, as both landlords and tenants navigate the challenges posed by economic pressures and legislative changes. The call for comprehensive government action to address these issues is growing louder among advocates and industry leaders.