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Second-charge mortgage repossessions hit record low in 2015

11 February 2016

New figures released today by the Finance & Leasing Association (FLA) show that the number of second-charge mortgage repossessions was 228 in 2015 – the lowest level for at least seven years. In the final quarter of 2015, the number of repossessions was 33, down 58.2% on the same quarter in 2014.

The rate of second-charge mortgage repossessions, as a percentage of average outstanding agreements, has fallen from 0.34% in 2009 to just 0.10% in 2015.

In 2015, the second-charge mortgage market reported new business growth of 34% by value to £844 million, and 9% by volume to 20,647 – the fourth consecutive year of growth. Although new business was at its highest annual level since 2008, it remains significantly lower than pre-crisis levels, when it peaked at over £5 billion by value and 200,000 by volume.

Commenting on the figures, Fiona Hoyle, Head of Consumer and Mortgage Finance at the Finance & Leasing Association, said:

“Repossessions fell by 49% in 2015 as a whole, as second charge mortgage providers continue to do everything possible to help customers who are struggling with their finances.

“Second charge lenders are putting the finishing touches to systems changes, as they prepare to implement the Mortgage Credit Directive and MCOB ahead of the 21 March 2016 deadline. A huge amount of work has been completed to extremely challenging deadlines.”

Table 1: The number of actual properties taken into possession by FLA second charge mortgage providers1

 

 Time period

 

Number of possessions in the quarter

 

 % change on the same quarter in theprevious year

 Annual total

% change on the previous year

 

2008 Total

 

2009 Total

 

2010 Total

 

Q1 2011

Q2 2011

Q3 2011

Q4 2011

 

Q1 2012

Q2 2012

Q3 2012

Q4 2012

 

Q1 2013

Q2 2013

Q3 2013

Q4 2013

 

Q1 2014

Q2 2014

Q3 2014

Q4 2014

 

Q1 2015

Q2 2015

Q3 2015

Q4 2015

 

 

 

 

 

 

 

 

195

234

220

178

 

151

139

163

175

 

226

183

144

123

 

128

133

107

79

 

72

67

56

33

 

 

 

 

 

 

 

 

-25.6%

1.7%

3.8%

11.3%

 

-22.6%2

-40.6%2

-25.9%2

-1.7%2

 

49.7%2

31.7%2

-11.7%2

-29.7%2

 

-43.4%

-27.3%

-25.7%

-35.8%

 

-43.8%

-49.6%

-47.7%

-58.2%

 

1,612

 

1,467

 

864

 

 

 

 

827

 

 

 

 

628

 

 

 

 

676

 

 

 

 

447

 

 

 

 

228

 

 

 

-9.0%

 

-41.1%

 

 

 

 

-4.3%

 

 

 

 

-24.1%2

 

 

 

 

7.6%2

 

 

 

 

-33.9%

 

 

 

 

-49.0%

 

  1. Possession proceedings arising from FLA members’ second charge mortgage books, which have led to actual possession by the second mortgage provider.
  2. There were changes to the sample in Q1 2012 and Q1 2013 due to changes in FLA membership.

Notes to Editors

  1. FLA members in the consumer finance sector include banks, credit card providers, store card providers, second-charge mortgage lenders, motor finance providers, personal loan and instalment credit providers.
  2. In 2015, FLA members provided £110 billion of new finance to UK businesses and households. £81 billion of this was in the form of consumer credit representing almost a third of total new consumer credit written in the UK in 2015.