There were 74,440 homeowner mortgages in arrears of 2.5% or more of the outstanding balance in the third quarter of 2022, according to figures published by UK Finance.

This was down 1% in comparison to Q2 this year.

Within the total, there were 28,910 homeowner mortgages with more significant arrears, those representing 10% or more of the outstanding balance, which was a level broadly unchanged from the previous quarter.

UK Finance’s data also revealed that there were 5,760 buy-to-let (BTL) mortgages in arrears of 2.5% or more of the outstanding balance in Q3, a total that had climbed by 2% compared to Q2. Within this total, there were 1,780 BTL mortgages in arrears of 10% or more, which was 1% fewer than the the last quarter.

Elsewhere, the banking body’s figures showed that 700 homeowner mortgaged properties were taken into possession in Q3, as well as 390 BTL mortgaged properties. These figures reflected a 15% increase and 11% rise on the on Q2, respectively.

Commenting on the figures, mortgage expert at Quilter, Karen Noye, said that mortgage possession actions are starting to increase at a “significant rate”, although levels still remain below pre-pandemic levels.

“In the face of the pandemic, the FCA put a stop to all repossession proceedings from March to September 2020 during which time no repossessions took place,” Noye said. “After that the FCA advised mortgage lenders not to commence or continue possession proceedings until April 2021, unless there were special circumstances.

“As a result, there were only 10 repossessions from April 2020 to March 2021, and 744 in July to September 2022, up 91% compared to the same quarter in 2021.

“Repossessions spiked after the financial crisis but since then due to lenders taking a more proactive approach to helping struggling borrowers and also low interest rates the levels of repossessions have dramatically decreased.

“However, in the face of the cost of living crisis sadly the numbers of repossessions is starting to climb again. Historically, periods of high interest rates has coincided with an uptick in the number of repossessions due to people’s monthly payments increasing to levels they can no longer pay. With high energy and food prices some people will start to struggle to heat their homes, eat and service their mortgage and this will lead to repossession.”

Share Story: