Q4 2013 sees further fall in second charge mortgage repossessions

13 February 2014

Figures released today by the Finance & Leasing Association (FLA) show second charge mortgage repossessions fell in Q4 2013 by 29.7%1 to 123, compared with the same quarter in 2012. Overall in 2013, 676 properties were repossessed by second charge mortgage lenders, up 7.6%1 compared with 2012, but remaining low by historic standards.

Commenting, Fiona Hoyle, Head of Consumer Finance at the FLA said: “Second charge mortgages will be regulated by the Financial Conduct Authority from April and must comply with the Mortgage Directive when it is introduced in 2016.

We hope the new rules governing the secured lending sector will facilitate closer collaboration between first and second charge mortgage lenders in repossession cases, to avoid the potential for duplicate court proceedings and costs for consumers who are already in financial difficulty. “Based on responses from FLA second charge mortgage providers, we expect the number of repossessions in 2014 to be at a similar level to last year.”

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

 

Time period

 

Number of possessions

in the quarter

 

 

% change on the same quarter in the

 previous year

 

Annual total

 

% change on the previous year

2008 Total

2009 Total

Q1 2010

Q2 2010

Q3 2010

Q4 2010

 

Q1 2011

Q2 2011

Q3 2011

Q4 2011

 

Q1 2012

Q2 2012

Q3 2012

Q4 2012

 

 

 

Q1 2013

Q2 2013

Q3 2013

Q4 2013

 

 

 

262

230

212

160

 

195

234

220

178

 

151

139

163

175

 

 

 

226

183

144

123

 

 

-33.7%

-45.8%

-48.7%

-31.9%

 

-25.6%

1.7%

3.8%

11.3%

 

-22.6%2

-40.6%2

-25.9%2

-1.7%2

 

 

 

49.7%2

32.4%2

-11.7%2

-29.7%2

 

1,612

1,467

 

 

 

864

 

 

 

 

827

 

 

 

 

628

 

 

 

 

 

 

676

 

-9.0%

-41.1%

-4.3%

-24.1%2

7.6%2

Notes to Editors

  1. There are breaks in the time series from Q1 2012 and Q1 2013 onwards because of changes to second-charge mortgage providers in FLA membership. On a same sample basis, the number of repossessions fell in Q4 2013 by 22.6% compared with the same quarter in 2012 and grew by 16.4% in 2013 as a whole.
  2. In 2013 FLA members provided £84.7 billion of new finance to UK businesses and households. £62.3 billion of this was in the form of consumer credit representing more than 30% of all unsecured lending in the UK.
  3. In November 2008, the FLA published Good Practice Guidelines for Second Charge Mortgages. The guidelines gave a commitment to help customers in difficulty by setting out the help that is available and committing lenders to consider each case on an individual basis, taking into account customers’ circumstances. The guidelines make clear that every effort will be made to come to an arrangement with customers in difficulty and that repossession is a last resort.
  4. FLA members comply with the Pre Action Protocol introduced in 2008, as well as the additional requirements introduced by the OFT for second-charge lenders in possession cases in 2009.

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