Number of possessions down 26% in Q1 2024
There was a slight increase in homeowner mortgage arrears in the UK, with figures reaching 96,580 in the first quarter of 2024, according to latest data from UK Finance.
The trade association attributed the 3% percent increase from the previous quarter to the ongoing cost-of-living pressures and rising interest rates.
The number of buy-to-let properties in arrears remained unchanged at 13,570.
Despite the increase in volume, the overall percentage of mortgages in arrears is relatively low, standing at 1.11% for homeowner mortgages and 0.69% for BTL mortgages.
The UK Finance report also highlighted a decrease in the number of homeowner and BTL properties in early arrears, which dropped by 2% and 11%, respectively, suggesting a movement of early arrears cases into deeper arrears, alongside a reduction in new early arrears cases.
For historical context, during the peak of the global financial crisis in the first quarter of 2009, the number of homeowner and BTL mortgages in arrears was 209,600, significantly higher than the current figure of 110,150.
UK Finance has also found that while there has been an increase in the percentage of properties taken into possession, this rise primarily stems from older arrears cases progressing through the court system.
The total number of possessions in the first quarter of 2024 was 1,470, a 26% decrease from the first quarter of 2019 and an 89% drop from the first quarter of 2009, which marked the peak of the previous possession cycle.
“The number of mortgages in arrears, while still low, continues to rise as households remain under pressure from the cost-of-living and higher interest rates,” said Charles Roe (pictured), director of mortgages at UK Finance.
“Lenders offer a range of support to anyone worried about their finances, with teams of trained experts ready to help. If you are struggling, reach out to your lender as soon as possible to discuss the support options available.”
For Arjan Verbeek, founder and chief executive of digital mortgage lender Perenna, the relentless rise in arrears is another worrying reminder of the instability homeowners are facing.
“Soaring interest rates and increasing costs have put immense pressure onto millions of households,” he said. “It’s clear the mortgage market needs reform, so people have more choice with respect to the interest rate risk they take on. Reform that we need to enact now.”
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