There were 72,380 homeowner mortgages in arrears of 2.5% or more of the outstanding balance during the first quarter of 2020, a figure 6% fewer than in the first quarter of last year, new UK Finance data has revealed.

Within the total, the trade association revealed there were 22,050 homeowner mortgages with more significant arrears – representing 10% or more of the outstanding balance – which was also 6% fewer than in the same quarter of 2019  

The data also showed there were 4,420 buy-to-let (BTL) mortgages in arrears of 2.5% or more of the outstanding balance in the first quarter of 2020, a level 6% fewer than in the same quarter of 2019. Within this total, UK Finance found there were 1,170 BTL mortgages in arrears of 10% or more of the outstanding balance, which was down 3% fewer from last year.      

The relatively small increase in arrears compared to the last quarter of 2019 is likely due to the early effects of Covid-19, UK Finance has suggested, adding that the industry has since introduced multiple measures to reduce financial difficulties for borrowers who are in need of support.

Furthermore, the latest figures revealed 1,070 homeowner mortgaged properties were taken into possession in the first quarter of the year – 23% fewer than in the same quarter of 2019 – while 640 BTL mortgaged properties were taken into possession in the first quarter, representing an annual drop of 8%.

UK Finance senior advisor mortgages, Jackie Bennett, commented: “While the number of mortgages in arrears are down six% year-on-year for both homeowners and landlords, and the number of possessions down 23% for homeowners, lenders know that coronavirus is currently causing financial difficulty for many customers.

“That’s why the banking and finance industry is working hard to support people during this difficult time, including providing more than 1.6 million mortgage payment holidays and introducing a three-month moratorium on any possessions.”

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