Repossessions remain lower than long-term averages
UK Finance has reported a slight decrease in homeowner mortgages in arrears, with numbers falling to 96,070 in the second quarter of 2024, representing less than a 0.5% drop compared to the first quarter.
The number of buy-to-let properties in arrears saw a marginal rise, increasing by just over 0.5% to 13,570.
Despite these changes, the overall proportion of mortgages in arrears remains relatively low, with 1.10% of homeowner mortgages and 0.69% of BTL mortgages currently affected.
UK Finance’s latest mortgage arrears and possessions data also showed a 3% and 6% decrease in early arrears cases for homeowner properties and BTL properties, respectively, suggesting a reduction in the number of customers falling into arrears. However, this decline also indicates that some borrowers in early arrears have moved into more serious arrears.
For context, the number of homeowner and BTL mortgages in arrears during the peak of the 2009 global financial crisis was significantly higher, with 209,600 mortgages in arrears in the first quarter of that year, compared to 109,650 in the first quarter of 2024.
The report also highlights a rise in the percentage of mortgaged properties taken into possession, attributed primarily to increased capacity within HM Courts Service to process historic arrears cases. However, possession numbers remain significantly lower than historical norms.
In Q2 2024, a total of 1,690 homeowner and BTL mortgaged properties were repossessed, which is 15% lower than the 1,980 possessions recorded in Q4 2019, before the pandemic, and 87% lower than the 13,200 seen in Q1 2009, at the peak of the previous possessions cycle.
“The number of mortgages in arrears has remained broadly flat compared to the previous quarter, which is good news following recent increases,” said Charles Roe (pictured), director of mortgages at UK Finance. “This reflects the fact, that while many households remain under pressure, the challenges of higher rates and the cost of living have begun to ease.
“However, we know that this will not be the case across all households, and lenders want to support anyone who might be struggling. Lenders offer a range of support to anyone worried about their finances.”
Roe urged anyone struggling with their finances to contact their lender for support, emphasising that doing so will not affect their credit score.
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