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Mortgage arrears jump comes as ‘no surprise’


In the second quarter of 2023, 81,900 homeowner mortgages with arrears of 2.5% or more, a jump of 7% quarter-on-quarter. Data gathered by UK Finance for its latest mortgage arrears possessions update also found that 8,980 households on buy-to-let mortgages were in arrears of 2.5% or more, a jump of 28% compared with the previous quarter.  

Mortgages in arrears accounted for 0.93% of all homeowner mortgages, and 0.44% of all buy-to-let mortgages outstanding in the second quarter of 2023. The report also found that 610 mortgaged properties were taken into possession, a 19% drop on the previous quarter. By contrast, the 440 buy-to-let mortgaged properties taken into possession was 7% higher than in the first quarter of the year.  

StepChange director of external affairs Richard Lane responded to the report, saying ‘It’s no surprise to see mortgage arrears and possession claims for mortgage holders continuing to rise. Our clients are telling us that they’re facing a perfect storm of rising costs and financial pressures. We know when households face significant rises in costs, as many millions are right now, that people cut back on spending or turn to credit to keep up with essentials. For many, these coping strategies will be unsustainable and store up financial problems further down the road. 

‘Protections brought in by government and mortgage lenders to mitigate the difficulties are welcome,’ Lane continued, ‘and will help to keep people in their homes over the coming months, but we would urge policymakers to monitor the situation closely and keep further inventions to support people who are struggling on the table if necessary. 

‘It’s equally concerning,’ he said, ‘to see the continued rise in the number of landlord possession claims on rented properties. The government must not ignore the impact of this crisis on private renters, who are facing unprecedented hikes in rent with little support in place for those who fall into financial difficulty. While a 12-month freeze on mortgage repossession has been instated, private sector tenants, who include families and people with vulnerabilities, have no such protections.

‘The Renter’s (Reform) Bill,’ Lane concluded, ‘needs to do more to recognise the intense financial pressure on private sector tenants and the support they, and landlords, need to help keep their homes.’