Scottish home repossession rate expected to be low in 2016, says HML

In its annual forecast, HML said that it expects a total of 830 repossessions – or 0.08 per cent of all residential mortgages – to take place across Scotland during 2016.

HML has also predicted a second consecutive year of low repossession rates in 2016 for the UK as a whole (10,326 or 0.09 per cent).

However, it also said that the threat to the UK steel industry could mean more repossessions in South Wales and other regions where jobs are at risk.

Andrew Jones, chief executive officer for HML, said: “Repossession is an extremely difficult time for any household, and HML works with mortgage providers to identify those at risk and provide support during times of financial difficulty.

“Another year of low repossession rates in the Scotland is welcome – but we shouldn’t ignore the prospect of big increases when interest rates eventually rise.

“Those hit hardest by other financial pressures such as unemployment are at particular risk, and if the UK steel industry deteriorates, we can sadly expect repossessions to increase in communities that are affected.”

HML is the only organisation to publish mortgage repossession forecasts broken down for Scotland, Wales, Northern Ireland and the England regions.

It said that it expected Northern Ireland to have the highest repossession rate (0.27 per cent), with the South West of England andits East Midlands having the lowest (0.06 per cent).

HML’s figures vary significantly from those put forward by the Council of Mortgage Lenders (CML) in December last year, which forecast a dramatic increase in repossessions (to 18,000).

HML says that the difference results largely from a change in expectations over the timing of interest rate rises, which the CML expected to take place in the second half of 2016, but is not now expected until 2017 at the earliest.

In September 2015, HML said that an interest rate rise would likely hit first-time buyers particularly hard, predicting 20,000 could fall into arrears if the base rate rose 1.5 per cent.

HML manages around £32 billion of assets across the UK and Ireland, and uses advanced analytical instruments and its knowledge of mortgages and property to develop a deep insight into trends within the market, particularly on negative equity, repossessions, arrears and interest-only mortgages.