This is based on changing employment dynamics, an ageing society increasingly reliant on work and debt, as well as a steadily rising Bank Rate.
The Association of Mortgage Intermediaries has urged lenders to prepare for an increase in arrears and repossessions over the coming years.
This is based on changing employment dynamics, an ageing society increasingly reliant on work and debt, as well as a steadily rising Bank of England base rate.
AMI made the statement in its Quarterly Economic Bulletin for the second quarter of 2019.
The report said: “AMI notes that the incidence of arrears on short-term finance loans funded by peer-to-peer and other bridging lenders has already risen.
“The number of borrowers falling behind on loan repayments, albeit in unregulated markets, is steadily climbing.
“Anecdotal evidence indicates that short-term lenders are beefing up collections departments in anticipation of further arrears.
“it may be that the longer term regulated market should consider its own readiness for rising arrears, particularly as the short-term sector usually leads the residential market where arrears and possessions are concerned.”
Elsewhere AMI reiterated its strong opposition to the FCA’s apparent move to incentivise customers to go execution-only – a direction indicated in the Mortgages Market Study, which was published in March.
The trade body added: “The so-called ‘difficulty’ of providing fully regulated mortgage advice online without the need for human intervention has become a convenient justification for the ‘need’ for execution-only.
“This is a complete misnomer. Market intelligence suggests that more than £7bn of mortgage applications have been originated online as part of a fully advised end-to-end process, with customers having the option to jump out to speak to an adviser if they need help…
“The market and the regulator must be extremely careful not to misdiagnose the challenges facing this market and rush to change policy that will result in thousands of mortgage borrowers receiving a poorer outcome than they should and would under existing regulation.
“Technology is not the problem; how some firms in the market are deploying it is.”
