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Mortgages written off by UK banks jump by half in 2018 – accountancy firm

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  • 03/12/2018
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Mortgages written off by UK banks jump by half in 2018 – accountancy firm
There are early signs of distress in the housing market, as the value of residential mortgages written off by lenders jumped by 58% in the year to the end of June, accountancy firm Moore Stephens found.

 

It is the first increase in the value of write-off since 2013/14, the group said.

There was £122m worth of lending written-off this year, up from £77m in the year prior, according to the analysis of Bank of England data.

Moore Stephens said the increase could signal distress in the housing market and noted that at the same time house price growth has stalled across the UK.

Further interest rate rises could deepen the issue, the firm added.

In 2009 UK banks were forced to write-off £984m against residential mortgages.

Jeremy Willmont, head of restructuring and insolvency at Moore Stephens said: “The interest rate cycle has turned.

“The unfortunate collateral damage of interest rate rises is more financial pain amongst mortgage holders and more personal insolvency.

“Increasing mortgage write-offs could suggest the economy is beginning to display signs of slowing down.

“Whatever type of Brexit we end up with, concerns have been raised about the potential impact on the economy.

“We could see more unemployment and more mortgage repossessions, and the Bank of England has said that a soft Brexit is likely to be followed by more interest rate rises.”

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