"While homeowner possessions might be going in the wrong direction, there’s far worse in the post" - Target's Spencer responds to UK Finance data

14 August 2025

Mel Spencer, the growth director at outsourcer Target Group, said:

“This week, we’ve seen wage growth and employment slow in the three months to June – yet more evidence of a cooling jobs market under pressure from higher payroll taxes. There were further signs of a slowdown in the jobs market in July, too, with falling employment and vacancies last month. Payrolled employees declined by 164,000 in July compared to the same month last year. The number of vacancies across the economy fell by 44,000 – the 37th month of consecutive decline – to 718,000. It seems clear that firms are not recruiting new workers or replacing workers who have left. The number of employees on payroll has now fallen in ten of the last 12 months and there are 2.67 million more people claiming Universal Credit with “no work requirements” than there were in July 2024. The Bank of England has just had to cut interest rates to ease some of the pressure on households. That might have offered a few borrowers some relief, but it’s a sicking plaster on a festering wound.

“Going forward, the cooling labour market will drive up defaults. So, while the homeowner possession stats might be going in the wrong direction, there’s far worse in the post. A spike in defaults is heading at banks and building societies like an F1 car on the main straight at full throttle – when it arrives, unprepared lenders will feel like they’ve been in a 230mph crash.

“Borrowers will need support and lenders will need the right systems in place to manage processes. Early proactive contact and remediation will help keep possession as a last resort and secure better outcomes for borrowers and lenders. That means that investment in technology to manage loans isn’t optional – it’s urgent.”