Mortgage arrears steady in Q2 – UK Finance

UK Finance’s latest mortgage arrears and possessions data also showed a 3% and 6% decrease in early arrears cases for homeowner properties and BTL properties, respectively, suggesting a reduction in the number of customers falling into arrears. However, this decline also indicates that some borrowers in early arrears have moved into more serious arrears.

For context, the number of homeowner and BTL mortgages in arrears during the peak of the 2009 global financial crisis was significantly higher, with 209,600 mortgages in arrears in the first quarter of that year, compared to 109,650 in the first quarter of 2024.

The report also highlights a rise in the percentage of mortgaged properties taken into possession, attributed primarily to increased capacity within HM Courts Service to process historic arrears cases. However, possession numbers remain significantly lower than historical norms.

In Q2 2024, a total of 1,690 homeowner and BTL mortgaged properties were repossessed, which is 15% lower than the 1,980 possessions recorded in Q4 2019, before the pandemic, and 87% lower than the 13,200 seen in Q1 2009, at the peak of the previous possessions cycle.

“The number of mortgages in arrears has remained broadly flat compared to the previous quarter, which is good news following recent increases,” said Charles Roe (pictured), director of mortgages at UK Finance. “This reflects the fact, that while many households remain under pressure, the challenges of higher rates and the cost of living have begun to ease.