Repossessions plunge 93pc after banks banned from seizing homes

Lucy Burton
·1 min read
Houses for sale 
Houses for sale

Property repossessions have plunged 93pc after homeowners rushed to use mortgage holidays and banks were banned from seizing the houses of coronavirus-hit customers. 

Just 90 owner-occupied homes were repossessed in the second quarter of 2020, a drop of 93pc from a year earlier. There were 130 buy-to-let properties taken into possession, down 80pc on the same period of 2019 according to bank trade body UK Finance.  

The plunge comes after banks were ordered to treat homeowners fairly by the Financial Conduct Authority watchdog (FCA) and given a stern warning against evicting any customers as millions suffered from Covid hardship. All repossessions were banned unless the homeowner agreed or the property was empty. 

FCA bosses also told banks and building societies to grant mortgage payment holidays to all homeowners who requested one to help them get through the crisis. 

More than two million mortgage payment deferrals have now been approved, UK Finance said, with just under one million still in place as many borrowers begin to resume monthly payments. 

However there are concerns that the hundreds of thousands of renters who now owe money to their landlord could be kicked out once they exceed eight weeks of arrears. 

Rules established at the start of the coronavirus crisis blocked any eviction cases from being heard in court before August 24. Landlords were also told to give tenants three months’ notice of any action taking place, under emergency legislation in force until September 30

The FCA has said that mortgage lenders should not start or continue court action for repossession until at least October 31.