The study stated that without lenders’ leniency, arrears and possessions could very plausibly be double the current rate.
A recent survey for the Bank of England revealed that 11.8% of borrowers were benefitting from some form of forbearance.
Almost a third of those thought that they would be in arrears without lenders’ leniency.
Paul Diggle, property economist at Capital Economics, said: “The risk now is that a renewed contraction in the economy triggers job losses and a rise in the number of households struggling to cope with the huge squeeze on their real incomes.
“In that environment it’s plausible that lenders lose patience with some borrowers and withdraw forbearance, removing what has been a critical support keeping arrears and possessions low.”
The share of mortgages at least three months in arrears fell to 2% at the end of 2011 down from a peak of 2.5% in Q2 2009 while the most common forms of forbearance are a switch to interest-only or a reduction in the interest rate charged.
Another option that is increasingly popular is for lenders to capitalise mortgage arrears rolling them into the outstanding balance.
Once arrears have been capitalised, a borrower is no longer counted as being behind, removing them from the arrears statistics.
