The ‘cost of living’ crisis is an ongoing challenge for people living in the UK. For well over a year, the cost of essential goods has been increasing, which means that people are experiencing more challenging financial circumstances. A number of innovative money-saving strategies have been developed by citizens throughout the country to cope with this.
With monthly property payments representing most peoples’ largest ongoing cost, it is no surprise that much of the UK population is struggling to meet their financial repayments. But what does this mean for repossessions in the UK? Have they been on hold in light of the cost of living crisis? Read our blog below to learn all about this ongoing issue.
What is the Cost of Living crisis?
The ‘cost of living’ crisis in the UK has been experienced since the end of 2021. It is caused by the prices for many essential goods increasing faster than household incomes, meaning that people have less money readily available.
The cost of living crisis has had a significant impact on the property market, because it is more difficult for homeowners to meet their monthly repayments. Many tenants have struggled to pay their monthly rent as well.
It has been reported that the housing market has become quieter than usual in the early months of 2023, because people have less money to spend on a new property. Many of those who are in the market for a new house are looking to downsize, because they can no longer afford the ongoing bills.
Have House Repossessions been put on Hold in the UK?
No, house repossessions have not been put on hold in the UK, despite the cost of living crisis. Homeowners and tenants still have a responsibility to meet their ongoing payments, regardless of the circumstances.
In the final months of 2022, statistics from the Department of Justice revealed that home repossessions had increased significantly in the UK, compared to the same period of the year before. This demonstrates that house repossessions have not been put on hold, and are unfortunately on the increase.
For people struggling to meet their monthly payments, they have had to be creative about ways to cut costs and save money. Switching their food shopping to cheaper stores is one common method, while finding ways to cut down on petrol costs (such as walking more often and using public transport) is another. There are countless methods used by UK citizens at the moment to save money, and each of these are being done to ensure their house is not repossessed due to an inability to pay.
If you are struggling to meet your repayments and are considering selling your property, then you should research our tips for selling your home quickly.
Are UK House Repossessions Recorded?
Yes, UK house repossessions are recorded.
House repossessions in the United Kingdom are recorded on the Land Registry. When a repossession takes place, the mortgage lender will inform the Land Registry, and they will then update the records. This will then be permanently on the title deed as it is a chronological record of the property’s history.
Repossessions don’t get published in the same way as insolvencies, so you don’t need to worry about this information being instantly accessible. However, anyone can access a copy of the title deeds if they want to, and find out whether a property has been repossessed.
What Happens After your House is Repossessed?
Once a house repossession is granted by a court, you will typically have up to 28 days to vacate the property. After this point, you can be forcibly evicted. However, keep in mind that it is possible to stop house repossession, and you should aim to do so if possible.
Once you have left the property, you may be presented with a money order, which is when you are required to pay the arrears you have outstanding, the court fees, as well as your lender’s legal costs. After the property has been repossessed, the lender will try and sell it as quickly as possible.
From here, your local council has an obligation to find a new home for you. Your circumstances will determine the quality of property you receive, and how quickly. Emergency accommodation, at least, can be sorted very quickly.
If you are looking to get another mortgage further down the line, you may need to wait a couple of years at least before applying for one. In the first year after repossession, you are unlikely to be granted a mortgage by a lender, because you are considered too big of a risk.
How Common is Bankruptcy for UK Homeowners?
In 2022, approximately 1 in 399 adults in the UK entered into some form of insolvency, which is a rate of 25 per 10,000 people. This figure was slightly higher than the previous year, which can be attributed to the increasing challenges of the cost of living.
Of those 118,850 insolvencies, only 6,662 were bankruptcies, with the rest being made up of debt relief orders (24,219) and individual voluntary arrangements (87,969).
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