"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."
- Charles Roe, director of mortgages at UK Finance
UK Finance’s latest arrears and possessions data shows a 3% increase in the number of homeowner mortgages in arrears, rising to 96,580 in Q1 2024.
UK Finance says the increase was driven by the "continued impact of cost of living pressures and higher interest rates".
The number of buy-to-let properties in arrears remained the same as the previous quarter at 13,570.
Homeowner and buy-to-let properties in early arrears fell by 2% and 11% respectively in Q1. In part, this reflects mortgages in this early band moving into deeper arrears positions. But UK Finance says it also points to fewer customers moving into this band and "suggests we’ll see a limited increase in arrears cases for Q2 2024".
The overall proportion of mortgages in arrears remains low, at 1.11% of homeowner mortgages and 0.69% of buy-to-let mortgages. For comparison, the number of homeowner and buy-to-let mortgages in arrears in Q1 2009, the peak in arrears numbers during the global financial crisis, was 209,600 – almost twice the 110,150 seen in the first quarter of this year.
Possessions
While the percentage of mortgaged properties taken into possession has risen, this is largely due to historic arrears cases now working through the court system.
Possessions numbers remain very low compared to historic norms. A total of 1,470 homeowner and buy-to-let mortgaged properties were possessed in Q1 2024. This is 26% lower than the 1,980 seen in Q1 2019, before the pandemic, and 89% lower than the 13,200 seen in Q1 2009 - the peak of the previous possessions cycle during the financial crisis.
Charles Roe, director of mortgages at UK Finance, said: “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."
