Repossessions show north-south divide

The number of people losing their homes to repossession has been lower than in previous times of recession or low economic growth thanks to lower interest rates, but many are still suffering such a fate.

A study by chartered surveyors e.surv has found that there is a growing north-south divide in homes being lost this way, based on figures from the second half of 2011.

It found that while the national rate of repossession in that period was 15 homes per 10,000, the level was much higher in some areas, with the north-east and the M62 corridor suffering the most. Overall, seven of the ten postal areas with the highest rates of homes being taken back by lenders were in northern England.

The worst-hit post town was Chester, at 53 per 10,000, while Oldham recorded 27 per 10,000 and Durham 26 per 10,000.

According to the study, this may be attributed to cuts in public sector spending as these have impacted more on northern regions.

The more affluent south has performed much better, with eight of the ten postcodes suffering the lowest rates of repossession being in the south.

Discussing the regional variations, business development director at e.surv Richard Sexton remarked: "With local economies in the north declining faster than their southern counterparts, proportionally more northern borrowers have struggled to keep up with their mortgage repayments and banks have been forced to repossess more homes.

"The south and south east, with a bigger proportion of the workforce employed in the private sector, hasn't been left as groggy by the economic blows dealt by the government's austerity programme."  

However, there are exceptions to the rule. Northumberland in the north east saw just one repossession per 10,000, while east London and south Wales bucked the regional trend as these areas were hard hit.

Indeed, the latter finding has been backed by a separate piece of research by housing charity Shelter. While still identifying Yorkshire and the north-east as hotspots for repossessions, it indicated that the highest risk in terms of local government area is the east London Borough of Braking and Dagenham. Its top five was widely spread geographically, with the other four including Thurrock in Essex, the south London borough of Lewisham and two areas of the north west, Knowsley and Rossendale. 

So while the north may be bearing the brunt, southern-based homeowners are far from immune to repossession.

As Shelter's chief executive Campbell Robb noted that many people imagine repossession can never happen to them, but stated that the harsh reality is very different.

He said: "The journey from being a homeowner to becoming homeless can be frighteningly swift, with just one small thing like a wage cut, a health problem or a job loss meaning that a family can no longer meet their mortgage payments."

For people who might be at risk – wherever they live – the key is to seek help and advice as soon as possible. The sooner action is taken, the sooner a solution may be found that can help people to stay in their homes, even in situations that may seem hopeless.

By James Francis