UK Finance has published its latest report on mortgage arrears and possessions, covering the period for Q2 2024.
UK Finance today releases its latest mortgage arrears and possessions data for Q2 2024, while highlighting continuing lender support for customers facing financial difficulty.
Key information:
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- The number of homeowner mortgages in arrears was broadly unchanged throughout Q2 2024 compared to the previous quarter.
- The number of buy-to-let (BTL) mortgages in arrears saw a marginal (one per cent) increase compared with the previous quarter.
- The number of homeowner mortgages in early arrears (between 2.5 and five per cent of the outstanding balance) fell by three per cent compared with the previous quarter while the number of BTL mortgages in early arrears fell by six per cent.
- 980 homeowner mortgaged properties were taken into possession and 710 BTL mortgaged properties were taken into possession. These numbers remain significantly lower than long-term averages.
- Mortgage lenders continue to offer tailored support to anyone struggling with their mortgage payments.
Homeowner and buy-to-let mortgage arrears:
UK Finance’s latest arrears and possessions data shows a marginal decrease (less than 0.5 per cent) in homeowner mortgages in arrears to 96,070 in Q2 2024, compared with Q1 2024.
The number of BTL properties in arrears showed a marginal increase (just over 0.5 per cent) compared with the previous quarter, to 13,570.
The overall proportion of mortgages in arrears remains low, at 1.10 per cent of homeowner mortgages and 0.69 per cent of BTL mortgages.
Homeowner and BTL properties in early arrears fell by three per cent and six per cent respectively. This points to fewer customers falling into early arrears and suggests we’ll see a limited increase in arrears cases in the next quarter. However, the decrease also partly reflects some customers previously in early arrears moving into more serious arrears shortfalls.
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 109,650 seen in the first quarter of this year.
Possessions:
While the percentage of mortgaged properties taken into possession has risen, this is largely due to the HM Courts Service increasing capacity to work through historic arrears cases.
Possessions numbers remain very low compared to historic norms. A total of 1,690 homeowner and BTL mortgaged properties were possessed in Q2 2024. This is 15 per cent lower than the 1,980 seen in Q4 2019, before the pandemic, and 87 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 support for borrowers:
Lender stress tests have ensured borrowers are 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, we know that other factors can also impact customers’ ability to manage their mortgage payments. We 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.
Contacting your lender to find out what support is available will not impact your credit score.
Charles Roe, Director of Mortgages at UK Finance, said:
“The number of mortgages in arrears has remained broadly flat compared to the previous quarter, which is good news following recent increases.
“This reflects the fact that, while many households remain under pressure, the challenges of higher rates and the cost of living have begun to ease.
“However, we know that this will not be the case across all households, and lenders want to support anyone who might be struggling.
“Lenders offer a range of support to anyone worried about their finances.
“If you are worried about your finances, please reach out to your lender as soon as possible to discuss the support options available.
“Doing so won’t affect your credit score.”
Kindly shared by UK Finance