Where are England’s housing repossession hotspots?

There is a stark divide between the north of England, which is at a higher risk of home repossession, and the south, according to Shelter‘s report, England Repossession Risk Hotspots.

However there is also wide variation and clustering within these larger areas. Local authorities with some of the highest possession claims made by mortgage lenders include Durham and Tyneside, the West Midlands cornubation and a cross-section of northern England from the Mersey to the Humber [see graphic below].

Variation is most pronounced in London, where the rate of possession claims in Barking and Dagenham – the highest in England at 8.44 claims per 1,000 – is nearly six and a half times that in Kensington and Chelsea, where there is only 1.3 claim per 1,000 homes.

Shelter used the latest 2011/2012 Ministry of Justice statistics on possession claims issued by mortgage lenders – the first step in a process which can result in a homeowner losing their home – to compile a national picture and identify risk hotspots.

The report also found, perhaps unsurprisingly, that higher rates of repossession are most likely to be found in areas with higher and increasing rates of unemployment. For example, those areas with the highest rates of possession claims have an average employment rate of 10 per cent, compared with 5.5 per cent for those with the lowest rate. The UK’s current rate of unemployment stands at 8.2 per cent.

Despite some areas’ high risk of repossession, Bernard Clarke, spokesperson for the Council of Mortgage Lenders (CML) told Channel 4 News that the rate of repossessions had not escalated as sharply as predicted after the economic crash.

Rising unemployment, rising living costs and high house prices mean that many people are living close to the edge already, and risk falling into a spiral of debt and repossession. The journey from being a homeowner to becoming homeless is frighteningly swift. Campbell Rob, Shelter

“Our figures show that despite worsening economic backdrop, arrears and possessions have risen more slowly than expected,” he said. “Everyone’s been helped by low interest rates. But that’s not to be complacent – there are people at risk, and we urge people to talk to their lender at the earliest possibility. There is help to get people through a period of temporary payment problems.”

The latest figures from the CML, released in May, showed a fall in arrears but a rise in home repossessions from 8,700 to 9,600 in the first quarter of 2012 – the same as those repossessed over the same period of 2011.

Shelter’s chief executive, Campbell Rob, said most people were of the opinion that repossession was something that couldn’t happen to them.

“But rising unemployment, rising living costs and high house prices mean that many people are living close to the edge already, and risk falling into a spiral of debt and repossession,” he said. “The journey from being a homeowner to becoming homeless is frighteningly swift.

“Housing is the largest monthly cost for many homeowners, yet the affordability of housing is not getting the same government attention as the monthly costs of other essentials such as food or energy bills.”