e.surv’s analysis of court-ordered repossessions in England and Wales in 2013, broken down by post code, found there were 5.6 repossessions per 1,000 households in the North, 44% higher than the 3.9 repossessions per 1,000 households in the South. This compares to 6.3 repossessions per 1,000 households in the North and 4.4 in the South in 2012.
Eight in ten Northern towns (78%) were home to more repossessions than average in 2013. The North West, North East and Wales were repossession hubs in 2013, with 6.0, 5.9 and 5.8 repossessions per 1,000 households respectively. The South West – the area with the lowest number of repossessions per year – experienced the biggest improvement, with repossessions falling 15% over the past year.
Richard Sexton, director of e.surv chartered surveyors, highlights that he North is still home to the largest wedge of repossessions, despite improvements in household finances across the country.
"Both the North West and the North East are still paying the price of recession-driven public sector job cuts – which stimulated a glut of local repossessions. The whole country is now in recovery, but the North has the furthest to go to catch up, and is comparatively lagging behind.”
Repossessions falling in every region
Total repossession court-orders fell 10% from 59,588 in 2012 to 53,325 in 2013. On average, there were 4.7 repossessions per 1000 households in 2013, down from 5.2 in 2012. Repossessions fell in every region of England and Wales.
Mr Sexton, explains: “The economic recovery has truly taken hold. Rock-bottom interest rates have enabled home-owners to pay down debts, and mortgages have become much cheaper, which has eased the pressure on household finances. Repossessions have fallen rapidly as a result. The labour market is picking up pace and real wages are expected to start growing in the next few months. That will further free up finances.
There is one looming challenge which could throw the repossessions recovery off course. At some point soon the Bank of England may choose to raise the base rate. A higher base rate will translate into higher repayments for many, which could tip a whole host of borrowers into the red. The base rate rise may cause repossessions to temporarily bounce back.”
Repossessions by postcode area
In total, 86% of towns in the North West had more repossessions than the average in England and Wales in 2013. In fact, five of the worst ten towns for repossessions were in this region. North-West town Oldham had the highest rate of repossessions – with 8.6 repossessions per 1,000 households – almost double the average number in England and Wales (4.7). Other North West towns in the top ten repossession postcodes included Wigan (4th highest with 7.4), Blackpool (5th highest with 7.0), Liverpool (9th highest with 6.9) and Manchester (10th highest with 6.8).
Lancaster (4.6) and Carlisle (4.1) were the only towns in the North West to have lower than the average number of repossessions.
But although the rate of repossessions remains far higher in the North, some of the best improving areas are to be found in the North West and in Yorkshire & Humber, suggesting the North South divide may be beginning to narrow. Carlisle in the North West saw repossessions fall 26% year-on-year, and Harrogate in Yorkshire & Humber saw a fall of 23% – both more than double the average.
Richard continues: “These are the fledgling signs that the North-South divide in repossessions is beginning to close. It is a significant gap to bridge. Eight in ten Northern towns have higher than average repossessions rates. But as local economies come alive, Northern towns are catching up and the divide is starting to narrow.”
London improving more slowly than elsewhere
Repossessions are falling more slowly in London than in any other region of the UK. The repossessions rate in the capital fell 8% between 2012 and 2013, compared to 11% across England and Wales.
There were 4.7 repossessions per 1,000 households in the capital in 2013, slightly more than the average across England & Wales. London contained both some of the worst and some of the best areas for repossessions. In Greater London town Romford – the second worst area – there were 7.8 repossessions per 1,000 households in 2013, and in South-East London there were 6.9. But at the other end of the spectrum, the two areas with the least repossessions also fall within the capital: East Central London (where only 1.0 in every 1,000 homes was repossessed last year) and West London (2.2 homes in every 1,000).
Richard concludes by pointing out that although London may be the nerve centre of the UK, it is not improving as quickly as other regions in terms of repossessions.
"Punitively high house prices mean there are a whole host of buyers on the outskirts of the capital who are struggling to keep up with mortgages repayments. Areas like Romford, Croydon and South East London still have high levels of repossessions.”
