Five questions on: Repossessions and evictions

 

What's the difference?

They both leave people homeless but repossessions occur when lenders snatch back people's homes because they haven't met their mortgage payments; evictions come when those who rent are forced out, usually because of non-payment.

Why are they in the news this week?

New, record figures have been published for both. Repossessions are down while evictions are up. Repossessions fell to 21,000 last year, the lowest number since 2006, according to the Council of Mortgage Lenders. There were also fewer mortgages in arrears at the end of 2014 than at any time since 2006, with around 116,800 loans in arrears of 2.5 per cent or more of the amount borrowed.

That's good news, isn't it?

It certainly is. But that there are fewer repossessions is largely down to the record low interest rates enjoyed by borrowers for the past few years. This has meant that mortgages have remained largely affordable for those who have stayed in work. That could change when interest rates go up as many may find it harder to keep pace with rising monthly mortgage commitments.

What's happened to evictions?

Ministry of Justice figures show that almost 42,000 households in England and Wales have been evicted in the past year, the highest total since records began in 2000.

That isn't good news, is it?

It certainly isn't. Campbell Robb, chief executive of the homeless charity Shelter, said: "The findings paint a grim picture of the devastating impact our shortage of affordable homes is having on thousands of renters every month. Behind the statistics stands a person or family who's gone through the trauma of losing their home. The only way for politicians to fix this crisis for good is to commit to building the affordable homes that we need."

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