The Brief: The Ministry of Justice has reported that mortgage repossessions have risen 91% year over year, while landlord repossessions have soared to 106%. These figures exclude transactions from Q3 which are expected to be even higher given the increase in interest rates.
Why It Matters: According to The Independent, the Liberal Democrats are proposing a £3 billion mortgage protection fund that will cover up to £300 a month for those whose mortgage payments have increased by 10%. They suggested that funding could be sourced from a tax break reversal from large banks.
Finanze Foresights: The spike in both mortgage and landlord repossessions comes as a result of the cost-of-living crisis which has affected more than 93% of adults in the country. The ONS also points out that 30% of adults are already finding it much harder to keep up with their mortgage payments, an increase of 4% compared with last year. The interest rate hikes by the Bank of England (BoE) as well as the turmoil caused by the mini-Budget have resulted in mortgage costs rising in the last few months. During the pandemic repossessions were restricted between April 2020 to March 2021 as the Financial Conduct Authority (FCA) requested lenders to only pursue court action as a last resort. Since it was lifted, the number of claims have started to soar. The proposed mortgage protection fund will certainly ease the pressure, assuming the current government choose to implement something similar, but funding the strategy will be another dilemma as both Sunak and Hunt have warned the country needs to brace for tough times ahead.
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