Figures from UK Finance show there were 81,900 homeowner mortgages in arrears of 2.5% or more of the outstanding balance in the second quarter of 2023.
The figure is 7% greater than in the previous quarter. However, repossessions were down with 610 homeowner mortgaged properties taken into possession in the second quarter of 2023, 19% fewer than in the previous quarter.
UK Finance also found there were 8,980 buy-to-let mortgages in arrears of 2.5% or more of the outstanding balance in the second quarter of 2023, 28% greater than in the previous quarter.
Buy-to-let repossessions were up, with 440 buy-to-let mortgaged properties taken into possession in the second quarter of 2023, 7% greater than in the previous quarter.
Mortgages in arrears accounted for 0.93% of all homeowner mortgages and 0.44% of all buy-to-let mortgages outstanding in the second quarter of 2023.
Interactive Investor senior personal finance analyst Myron Jobson said:
“The number of people entering and plunging deeper into mortgage arrears ticked higher in the second quarter of this year as the uptick in mortgage rates devastated budgets already squeezed by broader cost-of-living pressures. The harsh reality is the number of borrowers at risk of mortgage stress is at its highest level since 2008 – and the situation could worsen if inflation doesn’t play ball and remains at a high level.
“History has shown that the uptick in home repossession typically coincide with increases to the base rate. While higher monthly repayments could lead to a rise in mortgage arrears the current low level of unemployment could slow the rise in repossessions. However, with the cost of housing on the up, many homeowners struggling to repay their mortgage of families would be wary that something like a sudden illness or job loss, could leave them homeless.”
The government’s statistics also show that compared to the same quarter in 2022, landlord possession claims increased by 24% compared to 2022, while county court repossessions increased by 19%.
StepChange director of external affairs Richard Lane said:
“Protections brought in by government and mortgage lenders to mitigate the difficulties are welcome and will help to keep people in their homes over the coming months, but we would urge policy makers to monitor the situation closely and keep further inventions to support people who are struggling on the table if necessary.
“It’s equally concerning to see the continued rise in the number of landlord possession claims on rented properties. The government must not ignore the impact of this crisis on private renters, who are facing unprecedented hikes in rent with little support in place for those who fall into financial difficulty. While a 12-month freeze on mortgage repossession has been instated, private sector tenants, who include families and people with vulnerabilities, have no such protections. The Renter’s (Reform) Bill needs to do more to recognise the intense financial pressure on private sector tenants and the support they – and landlords – need to help keep their homes.”
