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The amount of mortgages in arrears reached £20.3 billion in the fourth quarter of 2023, an increase of 50.3% on 2022.
Rolling back to Q4 2022, this figure is £13.5 billion, demonstrating just how difficult times have become for mortgage holders.
During this period, lending costs rose significantly as the Bank of England raised its benchmark interest rate from 2.25% in Q4 2022 to 5.25% in Q4 2023.
Karen Noy, mortgage expert at asset management firm Quilter, said: “This shows that the huge rise in mortgage rates we’ve seen over the past few years is really starting to take a toll on some borrowers. Unfortunately, this is causing them to fall into arrears.” They can’t afford to keep up with the increasing payments,” she said of the spike in delinquencies.
She then added: “Changes to National Insurance and Child Benefit in last week’s Budget will do little, given that many people are seeing their mortgage payments jump by more than £300 a month.”
Despite this alarming data, the delinquent loan balance percentage of 1.23% is still considered low.
Simon Gammon, Managing Partner at Knight Frank Finance, said: Much of that is down to patience by lenders, which has kept forced sales very low.
“While borrowing costs have probably peaked and should start to fall significantly over the summer, the numbers show we are not out of the woods yet and things remain very tough for many borrowers.
“Anyone concerned about missing a payment should contact their lender at the earliest opportunity. They may offer solutions such as switching to interest-only payments or extending the term of the mortgage. to help borrowers get through difficult times.”