UK Finance has reported that there were 76,580 homeowner mortgages in arrears of 2.5% or more of the outstanding balance in the first quarter of 2019, 4% fewer than in the same quarter of 2018.
Within the total, there were 23,520 homeowner mortgages with more significant arrears (representing 10% or more of the outstanding balance). This was 3% fewer than in the same quarter of 2018.
The proportion of homeowner mortgages in arrears remains at historically low levels, with the majority of borrowers continuing to repay their mortgages in full and on time each month.
There were 4,620 buy-to-let mortgages in arrears of 2.5% or more of the outstanding balance in the first quarter of 2019, 3% greater than in the same quarter of the previous year. Within the total, there were 1,200 buy-to-let mortgages with more significant arrears (representing 10% or more of the outstanding balance).
This was 12% greater than in the same quarter of the previous year. While we are seeing mixed signs in buy-to-let arrears, these do not indicate a clear increasing trend at this stage. Additionally, increases are small and from a low base.
570 buy-to-let mortgaged properties were taken into possession in the first quarter of 2019, 14% fewer than in the same quarter of the previous year.
1,380 homeowner mortgaged properties were taken into possession in the first quarter of 2019, 10% greater than in the same quarter of the previous year, but well below the levels seen between 2009 and 2014 (see chart below). This slight increase in possessions has been driven in part by a backlog of historic cases which are being processed in line with the latest regulatory requirements.
Steve Seal, director of sales & marketing at Bluestone Mortgages, said: “Although mortgage arrears remain at near record lows, it is paramount that the industry does more to show borrowers where financial help is available should they need it.
“An unexpected life event such as an illness, accident or divorce may take a toll on a borrower’s finances – including their monthly repayments and credit score. Many could find that high-street lending will be at arm’s length when it comes to remortgaging, and a ‘computer says no’ response is likely to make them feel they could be denied elsewhere. Why wouldn’t they think that? After all, most high street lenders do little to point them in the right direction of where else to look.
“It’s clear to see why these individuals may feel discouraged. However, there are specialist lenders out there who cater to those going through financial difficulty and understand mortgage arrears are usually the result of a one-off event – not a repeat event. Specialist lenders recognise these complexities and offer tailored solutions to fit each borrower’s circumstances, reassuring customers in turn that there is, in fact, affordable lending available.”