UK Finance Releases Latest Mortgage Data for Q1 2024, Highlights Lender Support for Homeowners

UK Finance releases its latest mortgage arrears and possessions data for Q1 2024, while highlighting continuing lender support for customers

The number of homeowner mortgages in arrears “rose slightly (three per cent) in Q1 2024 compared to the previous quarter,” in line with UK Finance’s forecasts.

The number of buy-to-let (BTL) mortgages in arrears “remained flat compared to the previous quarter.”

The number of homeowner mortgages “in early arrears (between 2.5 and five per cent of the outstanding balance) fell by two per cent compared to the previous quarter while the number of BTL mortgages in early arrears fell by 11 per cent.”

870 homeowner mortgaged properties were “taken into possession and 600 BTL mortgaged properties were taken into possession.”

Mortgage lenders continue to “offer tailored support to anyone struggling with their mortgage payments.”

UK Finance’s latest arrears and possessions data “shows a modest increase (three per cent) in homeowner mortgages in arrears to 96,580 in Q1 2024, compared with Q4 2023.”

This was driven by the “continued impact of cost of living pressures and higher interest rates.”

The number of BTL 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 per cent of homeowner mortgages and 0.69 per cent of BTL mortgages.”

Homeowner and BTL properties in early arrears “fell by two per cent and 11 per cent 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 we’ll see a limited increase in arrears cases for Q2 2024.”

For comparison, the number of homeowner and BTL 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 BTL mortgaged properties were possessed in Q1 2024.”

This is 26 per cent lower than the 1,980 seen in Q1 2019, “before the pandemic, and 89 per cent lower than the 13,200 seen in Q1 2009 – the peak of the previous possessions cycle during the financial crisis.”

Lenders will always seek to ensure customers “remain in their homes and possession is only ever a last resort after other options have been explored with the customer.”

Lender stress tests continue “to help ensure borrowers will be able to keep up with their mortgage payments, even if their interest rate rises above the rate in place when they first took out their mortgage.”

However, they know that other factors “can also impact customers’ ability to manage their mortgage payments.”

They would encourage anyone worried about their mortgage payments “to reach out to their lender at the earliest opportunity to discuss the options available for their circumstances.”

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.”

UK Finance classifies mortgages as “being in arrears when the arrears reach 2.5 per cent of the outstanding balance.”

The government has launched new support “for anyone facing possession proceedings.”


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