Reports shows rise in mortgage arrears during Q1

May 26, 2023 by Brendan O'Neill

Mortgage Advisors

The figures for the first quarter of this year have shown a rise of 2% in the number of people with mortgages who have fallen into arrears when it comes to repayments.

These figures were published by UK Finance, and they also show that a total of 76,630 mortgage holders currently have arrears of 2.5% or higher when it comes to their outstanding balances. However, although concerning, it should be noted that this still places them in the category known as ‘lightest arrears’. That band covers debts of between 2.5% and 5%.

The number of mortgage holders who fall into that band at the moment is 27,700, which amounts to 5% more than the number for the final quarter of 2022. When it comes to buy-to-let mortgages, the percentage of borrowers who have fallen into arrears has risen considerably higher – by 16% – in comparison with the final quarter of last year.

UK Finance is stating in response to these figures that the situation is not one that should cause undue worry, with many lenders working with borrowers who are struggling to meet repayments. Close to 200,000 in that situation reached tailored forbearance agreements with their mortgage lenders over the past 12 months.

Adam Oldfield from Phoebus Software told Financial Reporter that:

“Once again there will be a great responsibility for lenders to identify borrowers that may be getting into difficulty and manage the situation with care.”

Mortgage advisors with CeMAP training can be a valuable buffer between lenders and borrowers who are struggling.