Mortgage possession claims up sharply: "the dam is bursting"

BROKERS have said the “dam is bursting” for many borrowers as new Ministry of Justice data published this morning shows that mortgage possession actions — claims, orders, warrants and repossessions — have continued recent rises and are all currently above the previous year’s levels.

Brokers say many borrowers who have come off lower rates onto higher ones, amid the ongoing cost of living crisis, are struggling to stay on top of their payments. One said: “Many who stretched themselves to the limit on low rates have been strained too far when rates have increased and it's now starting to show.”

Compared to the same quarter in 2024, mortgage possession claims (6,537) are up 22%, mortgage orders for possession (4,429) are up 31%, warrants issued (3,787) are up 28% and repossessions (1,146) are up 32%.

In contrast, the number of landlord possession actions across all stages (claims, orders, warrants, repossessions) have decreased compared to the same quarter of last year.

Claims (22,364), orders (17,514), warrants (10,307) and repossessions (6,709) have decreased by 9%, 5%, 8%, and 4% respectively compared to the same quarter in 2024.

Brokers said the data is staggering, but not unsurprising. Stephen Perkins, Managing Director at Norwich-based Yellow Brick Mortgages commented: “The increase in lenders taking action against borrowers in arrears and repossessions is staggering, but highly symptomatic of the ongoing cost of living crisis and rising mortgage rates over the past two years.

"Many who stretched themselves to the limit on low rates have been strained too far when rates have increased and it's now starting to show. These figures are also indicative of many losing jobs in the current economic climate.

"The landlord figures showing a different trend either suggests tenants are keeping up their payments better, or landlords are being more lenient or hesitant to act than lenders.

Bob Singh, Founder at Uxbridge-based Chess Mortgages, said the grim data was inevitable as more people came off ultra-low mortgage rates: "With more and more borrowers coming off their ultra-low rates and now facing huge monthly increases in their mortgage payments, this is no surprise. The cost of living crisis and higher interest rates have affected us all and those that took on additional debt during the low interest rate era will have a battle on their hands to stabilise their finances.

“This now places a further burden on local authorities to house those that have been displaced when housing is in short supply due to landlords having been forced out of the sector due to tax changes. Many borrowers fail to seek regular advice and extend themselves beyond their means. They also fail to seek assistance from the Government, who will assist with the interest payments via a loan to keep them housed. This begs the question, should lenders insist they seek advice prior to commencing legal action?”

Emma Jones, Managing Director at Runcorn-based Whenthebanksaysno.co.uk, described the figures as bleak: “These figures are bleak, especially when you consider that there are real lives behind each one. People are having to adjust to higher interest rates and many, based on this evidence, are struggling to do so. With so many people coming off ultra-low mortgage rates this year, the figures may get worse before they get better.”

Ben Perks, Managing Director at Stourbridge-based Orchard Financial Advisers commented: “The pressure on residential borrowers has been building and now the dam is bursting. The huge increases in repossession claims shows the grim reality of the struggle facing borrowers.

"These figures are set to rise, with record numbers coming to the end of ultra-low 5-year fixed rates this year. If ever there was a sign that the government needs to put more money in people’s pockets, this is it.”