WHAT a difference a few months can make in both politics and economics…

There’s now a new Prime Minister and Chancellor of the Exchequer in Downing Street – and the full implications of what’s widely regarded to have been a truly disastrous mini-budget are still unravelling.

By any stretch of the imagination, the fiscal outlook for the UK is not currently good.

For a start, we’re encountering the prospect of the longest recession in a century.

What’s more, we’re entering an unprecedented era when our economy is facing the quadruple whammy of higher interest rates, tax increases, spending cuts and price increases.

There can be little doubt about the gargantuan task now encountered by Rishi Sunak and Jeremy Hunt.

And then there’s the impact of everything that’s unravelling on the housing market…

The rising cost of living coupled with already stretched mortgage affordability is likely to decrease sales activity levels.

The Halifax House Price Index for October also showed average values were down 0.4% in October, following a 0.1% dip in September.

While a post-pandemic slowdown was always anticipated, there’s no doubt that the housing market received a significant shock as a result of the mini-budget which directly resulted in the acceleration of mortgage rate increases.

For the first time in years there’s a risk those people who bought property during the summer could quickly find that they are worth less than they paid.

The lack of confidence that’s currently present could quickly spiral downwards, meaning that price falls will become a self-fulfilling prophecy.

For obvious reasons, lenders must now be more cautious than ever about loan-to-value ratios.

Meanwhile, mortgage possession claims increased by 39% to 3,476 between April and June 2022 compared to the same period in 2021 when there were 2,499 claims.

This dramatic increase was due, in part, to evictions being banned until May 31, 2021, to protect borrowers during the coronavirus pandemic.

But there seems no doubt that lenders will face mounting backlogs and delays and there’s every expectation that the courts will soon be flooded with even more cases as the cost of living crisis intensifies, pushing even more borrowers into arrears.

Given the uncharted economic waters we’re now entering, the imperative for lenders to be able to relend at rates that are most advantageous to them using their own funds mounts each week.

To achieve this, the most proactive approach possible to property receivership must consistently be adopted.

With the courts and bailiffs widely expected to become even busier in coming months, it remains essential to ensure that each case is consistently as far advanced as possible as early as possible.

CG&Co has always adhered rigorously to this proactive strategy on behalf of our clients.

And we’ve no intention of deviating from this now that our dynamic and results-driven approach is truly needed by lenders most.