Bank repossession claims increase by 50%

Homeowners hit by the pandemic are now losing their homes, evicted by banks in court hearings, a joint probe by Money Mail and The Bureau Of Investigative Journalism has found.

The ban on bailiff-led evictions was extended until the end of May in England and the end of June in Wales. But the research has indicated that now repossession claims by banks have surged by 50%, rising from 750 in May to 1,160 in June.

Reporters have sat in on 115 mortgage cases at 30 courts across England and Wales over two months. Nearly half of the cases resulted in a possession order, and average homeowners were £7,900 in arrears. In 81% of hearings the homeowner did not have any legal representation.

The Bureau has found hundreds of mortgage possession cases in courts in England and Wales since the ban on enforcing home repossessions was lifted. Some were being pursued for as little as £1,000. This was despite explicit guidance from the Financial Conduct Authority (FCA), the regulator for financial services, that, due to the impact of the pandemic, lenders should only start court action as a last resort. The government has also said that no one should lose their home because of the pandemic.

In just under a third of the cases the Bureau witnessed, the impact of Covid-19 was raised in the courtroom. In many cases, the lender was granted a possession order anyway. Two people told the Bureau they were left feeling suicidal after the court session.

It appears some lenders are taking more action than others. In the four months immediately after the ban on bailiff repossessions was lifted at the end of May, the Bank of Scotland and Lloyds Bank – which are both part of the Lloyds Banking Group – appear to have brought a disproportionate number of claims. The two banks made up nearly 40% of all the mortgage lender claimants in 10 of the busiest courts, despite making up just 20% of the mortgage market.

The Bureau sent reporters to sit in possession hearings in 30 courts across England and Wales over two months, but found many lenders wanted the proceedings to remain secret. Lawyers acting on behalf of mortgage lenders repeatedly asked for our reporters to be excluded from hearings.