UK Finance has warned that home repossessions may surge tenfold in 2022 as coronavirus support measures come to an end, saying that while 2,900 properties were repossessed by lenders in 2020, this could rise to 22,300 in 2022.
Around 81,300 households were in home loan arrears last year, but figures suggest this could climb to 142,200 in 2021, prompting a surge in repossessions.
A ban on seizing homes put in place by the Financial Conduct Authority ends on 1st April, while analysis shows that the number of homeowners utilising mortgage holidays rolled out amid the pandemic currently stands at around 127,000.
Mortgage arrears will also rise to 142,200 this year from 81,300 last year according to the trade body, but fall back to 120,900 in 2022.
The Financial Conduct Aurthority (FCA) guidance released this month: ‘Mortgages and Coronavirus: Tailored support guidance‘ outlines the protocols mortgage lenders and other financial firms should employ if borrowers are struggling.
Its payment deferral guidance confirms all borrowers can delay payments for up to six months as long as the last monthly installment is no later than July 2021.
Commenting on the forecast Paula Higgins of the HomeOwners Alliance said “The Government needs to work with lenders on a long-term plan in preparation for the debt hangover we are facing.”