UK Finance is rolling out the next phase of its ‘Reach Out’ programme which aims to offer support to anyone who thinks they may struggle to make their repayments.
The message is to ‘reach out’ to your lender sooner rather than later – even if you haven’t yet missed a repayment but fear you might do in the near future.
It comes following the launch of the Mortgage Charter which the majority of lenders have signed up to and means they must provide solutions to borrowers in financial difficulties.
Today UK Finance, which represents many mortgage lenders, said mortgage borrowing had fallen in the first three months of the year.
Meanwhile, those who were taking out mortgages for the first time were opting to take out longer-than-standard terms. It said 21% of new first-time buyers (FTBs) extended their terms over 35 years.
For customers who were remortgaging product transfers, were becoming more popular. This is where borrowers coming to the end of their mortgage deal switch to a new mortgage with the same lender and means they do not have to go through affordability assessments.
In the same three months from January to the end of March, the number of customers who had fallen behind with mortgage repayments grew to 110,150 up from 107,250 cases in the last three months of 2023.
There were 1,470 mortgage repossessions in Q1 2024, below pre-pandemic levels.
Eric Leenders, managing director of personal finance at UK Finance, said: “Some households were in a better place financially in Q1 this year, but we are not out of the woods yet.
“Among the more positive signs, we can see that overdraft and interest-bearing credit card debt are at record lows, and many households have stopped using their savings to help with the rising cost of living.
“However, we know that this will not be the case across all households, and lenders want to support anyone who might be struggling.
“Cost of living pressures remain, and with 1.6 million mortgages due to come off fixed rates this year, there may be challenges ahead for some. If you are worried about your finances, your lender has help available – please contact them as soon as possible to discuss your options.”
