Receivership during the COVID-19 era: What the latest statistics show

By

Daniel Richardson - Partner CG&Co

They’re the newly released statistics that shine a spotlight on property receivership.

But what makes the government’s mortgage and landlord possession statistics for October to December 2021 particularly interesting is that they’re the first figures to be released since coronavirus restrictions were officially lifted.

Before highlighting the key findings, let’s briefly recap on the unprecedented situation we’ve all been working through.

In March 2020, governments in England, Scotland and Wales introduced a total eviction ban to prevent people having to leave their homes during the pandemic.

As the vaccination rollout gained pace, those restrictions have been reduced, with other protections such as the ban on bailiff-enforced evictions being lifted after several delays in England on June 1, 2021.

On October 1, 2021, notice periods for evictions in England finally returned to pre-pandemic levels.

In short, this meant that those giving notice of their intention to evict via either a Section 21 or Section 8 notice required two months’ notice, down from six months.

Consequently, the government’s mortgage and landlord possession statistics for October to December 2021 were always going to be interesting as they shine a spotlight on the first quarter that all notice periods returned to their pre-pandemic lengths.

The report’s authors highlight the “continued gradual recovery in all court actions” when compared to the same period last year – although numbers are generally still below pre-Covid-19 baseline levels.

In the last quarter of 2021, a total of 14,433 landlords possession claims were submitted, representing a decrease of 43% on the same period in 2019.

Personally, I was unsurprised to learn that ‘private landlords’ made up the largest proportion of these possession claims at 41% (5,912).

What’s more, private landlords are now starting as many court proceedings to evict tenants as were active before the pandemic commenced.

By contrast, the number of possession claims started by social landlords are massively down.

Between October and December 2021, there were a total of 6,849 orders for possession, 4,256 warrants and 2,706 repossessions representing decreases of 67%, 67% and 64% respectively on the same period in 2019.

What’s more, the average time from claim to mortgage repossession has increased to 111.9 weeks, up from 37.2 weeks in the same period in 2019 which, the report’s authors maintain, reflects the pause in actions due to Covid-19 restrictions.

There’s clearly a massive pent-up demand among lenders to recover properties where borrowers are in default and this is now expected to accelerate even more dramatically.

Decisive action must be taken at the earliest opportunity, particularly as the anticipated backlog of possession claims could take even longer to subside.

In my experience, effective engagement and negotiation with borrowers remain paramount to mitigating this situation.

This is something that we’ve done at CG&Co since the pandemic began to ensure that our clients have been able to use their own funds to relend at rates that are most advantageous to them.

Our Property Receivers work closely with our inhouse legal team to ensure that each case is consistently progressed as far as possible at the earliest opportunity.

With the courts – and bailiffs – becoming busier than ever before now things are back to ‘normal’, CG&Co intends to consolidate this strategy going forward.

None of us know how the next chapter of this Covid-19 era will evolve or how the government’s next mortgage and landlord possession statistics for the current quarter will manifest themselves.

But the one thing we can be certain of is this…

It remains absolutely imperative for lenders to work solely with the most proactive property receivers.

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