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Mortgage brokers have seen a surge in the number of homeowners who are behind on their mortgages in the three months to the end of June, and higher borrowing rates will clearly put them in arrears in the coming months. We anticipate a significant increase in borrowers.
The Bank of England Credit Situation Survey released yesterday showed the mortgage default rate in the three months to end May was 30.9 on the same index, up from 14 in the first quarter of 2023.
The figure was the highest in the survey since mid-2009, when the index exceeded 60.
The survey, which ran from May 30 to June 16, asked financial institutions to report changes in the second quarter of 2023 compared to the previous three months, with scores based on responses and market share. Assigned.
The survey found that while businesses expect demand for mortgages to drop sharply in the third quarter of 2023, mortgage and non-mortgage credit available to households is also expected to decline. rice field.
However, most lenders believe that the availability of loans to businesses will remain unchanged over the corresponding period.
“Loss and default rates on secured household loans increased in the second quarter and are expected to increase in the third quarter, financiers reported,” the World Bank said.
“Rates have already risen, but lenders expect collateralized loan loss and default rates to rise further in the next quarter,” said Steven Perkins, managing director at broker Yellow Brick Mortgages. “It’s not surprising given the high interest rates,” he said. It’s arrived now.
“request [for credit] It is also expected to decline in the third quarter, which is also to be expected in such a difficult economic environment.
“The Bank of England’s repeated rate hikes have done nothing to curb inflation and have had a huge impact on the economy, pushing the finances of millions of British households to the brink.”
R3 Mortgages director Liz Malik added: “It is very worrying that the default rate of secured loans has been rising and is expected to rise further.”