The number of people falling behind on their mortgage payments has risen sharply over the summer, according to new data from UK Finance, the trade body for lenders.
Between July and September, a total of 87,930 homeowners’ mortgages in the UK were in arrears, up 7 percent on the previous quarter and the third quarter of 2023, and 18 percent more than the same period last year.
The number of “least delinquent” mortgage borrowers with debt between 2.5 and 5 percent of their balance increased by 10 percent this summer.
The figures show landlords were under intense pressure, with the number of mortgage loans in arrears (BTL) standing at 11,540, an increase of 29 per cent.
Separate data from the Ministry of Justice shows that more and more landlords are trying to reclaim their properties from tenants. Landlord legal possession claims rose from 21,007 in fall 2022 to 24,938, an increase of 19 percent year over year.
The number of eviction orders issued by landlords increased by 17 percent from 15,350 to 17,977, and the number of orders authorizing a bailiff or bailiff to carry out an eviction increased from 8,573 to 9,753 (14%). The number of attacks increased by 11 percent from 5,464 to 6,080.
UK Finance said the increase in debt was small by historical standards but was due to the combined effect of cost of living pressures and higher interest rates.
They said landlords would be particularly hard hit as rising interest rates would be felt more acutely in the BTL sector, where landlords may not be able to raise rents to cover higher payments.
Homeowners’ mortgages in delinquency account for one percent of all homes with a mortgage in default, according to the report. For a BTL mortgage the value is 0.57 percent.
Mortgage delinquencies are less than half of 2009 levels, reflecting stricter financial checks introduced when borrowers initially took out mortgages, the report said.
UK Finance expects total homeowner and BTL mortgage debt to remain below 1 per cent of total mortgage-backed properties by the end of 2023.
The report says all lenders are offering support to anyone struggling to make mortgage payments. “There are a variety of options available to suit a client’s individual circumstances.”
Eric Linders, director of personal finance at UK Finance, said: “Anyone concerned about their mortgage payments should contact their bank as soon as possible.” support. The sooner you contact us, the more help your lender can offer.
“Also, contacting your bank to see what help is available will not affect your credit score.”
Source: I News
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