UK Finance’s latest arrears and possessions data shows a modest increase of 3% in homeowner mortgages in arrears to 96,580 in Q1 2024, compared with Q4 2023.
The trade body said this 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.
The overall proportion of mortgages in arrears remains low, at 1.11% of homeowner mortgages and 0.69% of buy-to-let mortgages.
Homeowner and buy-to-let properties in early arrears fell by 2% and 11% respectively. In part, this reflects mortgages in this early band moving into deeper arrears positions. But it also points to fewer customers moving into this band and suggests there will be a limited increase in arrears cases for Q2 2024.
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.
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, 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.
“Lenders offer a range of support to anyone worried about their finances, with teams of trained experts ready to help. If you are struggling, please reach out to your lender as soon as possible to discuss the support options available.”
