e.surv’s analysis of court-ordered repossessions in the second half of 2011, broken down by post code, found the north-east and the M62 corridor were the regions where repossessions were highest.
With public sector austerity and weak economic growth hitting northern regions disproportionately hard, borrowers in the north – particularly in urban areas dependent on public sector employment and with lower levels of affluence – have found it harder to keep up with mortgage payments.
Richard Sexton, business development director of e.surv, says: “Banks are playing a vital role in keeping people in their homes. They’ve been increasingly forbearing to borrowers in mortgages in arrears, and this has kept repossessions levels deflated.
“But it can’t last forever. The pace of public sector austerity is quickening, and the economy has ground to a standstill. This will push up unemployment and pillage personal finances, forcing more people into mortgage arrears.
“On top of that, the cost of funding mortgages is increasing for banks. Their balance sheets are being stretched to busting point by the euro zone crisis, which will mean they simply can’t afford to support as many struggling borrowers. With the north more exposed to the grind of public sector austerity and a downturn in the economy, the north-south divide in repossessions levels could become even starker over the coming months.”
Repossessions in the North East were significantly higher than the national average of 15 per 10,000 households. In Darlington and Durham, there was an average of 24 repossessions per 10,000 households, 60% higher than the national average. Similarly, the M62 corridor, which includes industrial Lancashire and parts of southern Yorkshire like Bradford and Doncaster, has a high level of repossessions compared to the national average.
On a broad level, court-ordered repossessions were significantly lower than the national average in the Home Counties and the South West. Repossessions were low across the Cotswolds, the West Midlands, the West Country and the southern coast of England. Oxfordshire saw only 12 repossessions per 10,000 households in the second half of 2011 – 20% lower than the national average.
The M62 corridor and the north-east dominate the list of postcodes with the highest number of repossessions. Chester, with 53 court-ordered repossessions per 10,000 households (over three times the national average), saw the highest number of court-ordered repossessions in England and Wales. Completing the top three are Oldham, with 27 per 10,000, and Durham with 26 per 10,000.
Affluent southern postcodes – with more wealthy retirees and lower rates of public sector employment – dominate the list of areas with the lowest number of repossessions. 8 of the 10 postcode areas with the lowest number of repossessions were in the south.
Levels were lowest in Galashiels, Northumberland, where there was only a single repossession per 10,000 households. Also in the list was the City of London, with only threerepossessions per 10,000 households. Conversely, seven of the ten postcode areas with the highest number of repossessions were in the north of England.