Growth in mortgage arrears slowing down in 2024

May 6, 2024 by Brendan O'Neill

Mortgage Advisors

Figures for the first quarter of this year have shown a slowing in the growth rate of total mortgage arrears compared with the final quarter of 2023, making for a welcome start to the year for the industry.

These figures reveal that there was 3.9% rate growth in mortgage arrears in the UK during 2024 Q1. By comparison, arrears grew by 5.7% in the closing quarter of last year, so the reduction is a significant one. In fact, it marks the lowest growth in mortgage arrears for a single quarter since September of 2022, when the mini budget was announced.

International credit intelligence firm Pepper Advantage published the figures. They are taken from its current residential mortgage roster for the UK, which amounts to more than 100,000 loans. The overall picture painted is of arrears growth slowing down but still at a high level – the highest since the financial crisis of 2008.

The North West and North East both saw a rise in the mortgage arrears growth rate, but they were the only regions where that was the case. The biggest slowdowns occurred in East Anglia and the West Midlands, where growth was 0.5% and 0.4% respectively.

Aaron Milburn from Pepper Advantage spoke to Mortgage Strategy about the findings:

“The slowing growth suggests an increasingly resilient UK economy as lower inflation and higher–than-expected wage increases alleviate pressure on household budgets in some areas.”

Those with CeMAP mortgage advisor training can view this as a cautious indicator of further housing market recovery.