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UK Finance Arrears and Possessions Data

ended 18. May 2023

UK Finance has just published its latest arrears and possessions data. Key points below. UK newswire, Newspage, asked brokers for their views (below).

  • 750 homeowner mortgaged properties were taken into possession in the first quarter of 2023, 50 per cent greater than in the previous quarter.          
  • 410 buy-to-let mortgaged properties were taken into possession in the first quarter of 2023, 28 per cent greater than in the previous quarter.
  • There were 76,630 homeowner mortgages in arrears of 2.5 per cent or more of the outstanding balance in the first quarter of 2023, 2 per cent greater than in the previous quarter.
  • Within the total, there were 27,700 homeowner mortgages in the lightest arrears band  (representing between 2.5 and 5 per cent of the outstanding balance). This was 5.0% greater than the previous quarter.
  • There were 7,030 buy-to-let mortgages in arrears of 2.5 per cent or more of the outstanding balance in the first quarter of 2023, 16 per cent greater than in the previous quarter.
  • Within the total, there were 3,420 buy-to-let mortgages in the lightest arrears band  (representing between 2.5 and 5 per cent of the outstanding balance). This was 33.1% greater than the previous quarter.

4 responses from the Newspage community

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Editor
Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
This data will come as a crushing blow to the FCA and the Bank of England. If anyone was considering how the affordability stress tests worked, it is now abundantly clear they don't when rates rise this quickly. Repossession is the final stage of a long process, and these rose by 50% over the quarter. This unfortunately means there is more bad news to come. Considering the menial effect of higher interest rates on the type of inflation we have, the Bank of England should be ashamed of itself for creating the misery we are seeing and the crisis that is developing.
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Editor
Justin Moy
Managing Director at EHF Mortgages
This data does not make good reading. Some of this will be directly associated with higher mortgage rates, some will be the higher living costs that we are having to deal with. Mortgage lenders are legally obliged, and genuinely wish to help borrowers, who are in financial difficulty, and can put a variety of plans together to help in the short term, such as interest-only or lengthening the term. A few of my clients with such challenges have been very pleased and surprised when they have spoken to their lender. None of us like to admit problems, but early action will make it much easier to remedy any situation. Don't be afraid to speak with your adviser or lender if you are struggling.
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Bob Singh
Founder at Chess Mortgages
It’s no surprise that many families and landlords have succumbed to the relentless pressure of high costs of living and spiralling interest rates. With the Bank of England using its only tool of raising interest rates to control inflation, this is an unintended consequence of their actions placing further pressure on the Government purse to rehouse the affected parties at a time when rents are at an all-time high and supply is low. The message here for those struggling is to take advice and communicate with lenders, who are very reasonable under these circumstances and repossession is often a last resort for them. Many lenders are missing out on the opportunity to design products and policies to help these borrowers. As draconian as it may seem, how many lenders insist on income protection or life cover? Hardly any. This responsibility also falls on advisers to ensure the client takes out suitable redundancy/PHI cover to ensure the income continues.
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Aaron Strutt
Product and Communications Director at Trinity Financial
It really is not a surprise that more people are struggling to pay their mortgages given the scale of rate rises we have seen and the financial problems in the wider economy. More people are wondering why the Bank of England are still pushing up rates and whether they really will be able to bring down inflation any time soon.