Number of mortgage-holders getting into arrears rose in final months of 2022
There were fewer mortgage-holders in the most serious arrears bracket than in the previous quarter and fewer repossessions, according to UK Finance.
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.The number of mortgage-holders getting into arrears increased in the final three months of 2022, according to a body representing lenders.
Across the UK, 75,170 homeowner mortgages were in arrears of 2.5% or more of the outstanding balance in the fourth quarter of 2022, which was 1% higher than in the previous quarter, UK Finance said.
There were also 6,060 buy-to-let mortgages in arrears of 2.5% or more of the outstanding balance in the fourth quarter of 2022, which was 5% higher than in the previous quarter.
However, there were fewer mortgage-holders in the most serious arrears bracket than in the previous quarter.
Some 28,390 homeowner mortgages had more significant arrears of at least 10% of the outstanding balance. This was 2% fewer than in the previous quarter.
The devastating impact of the cost-of-living crisis, rising rents and low wages has once again been laid bare as thousands more renters are faced with eviction and the very real threat of being left with nowhere to go
There were 1,770 buy-to-let mortgages with more significant arrears of at least 10% of the outstanding balance. This was 1% fewer than in the previous quarter.
The number of homes being repossessed also decreased compared with the previous quarter.
Some 500 homeowner mortgaged properties were repossessed in the fourth quarter of 2022, which was 29% fewer than in the previous quarter.
And 320 buy-to-let mortgaged properties were repossessed, which was a fifth (20%) fewer than in the third quarter of last year.
Lenders can offer various options to struggling borrowers, depending on individual circumstances. They may include, for example, extending the length of the mortgage or switching to interest-only payments.
Mortgage rates jumped last autumn following the mini-budget, but with many homeowners being on fixed rates, they will not have felt the impact immediately – until they come to re-mortgage.
Some 1.8 million customers are due to see their fixed-rate deals end at some point this year.
There have been some signs of fixed mortgage rates decreasing in recent weeks.
Increases in the Bank of England base rate have also been putting an upward pressure on borrowing costs.
Homeowners on variable rates tracking the base rate will have felt the immediate impact.
The most recent base rate increase added about £48.99 per month to the average tracker payment, according to UK Finance’s figures.
In further signs of what is to come, figures released by the Ministry of Justice showed mortgage repossession claims between October and December increased by 23% compared with the same period a year earlier in county courts across England and Wales.
The number of mortgage repossession claims increased from 2,570 to 3,160.
Demand for overpriced and unstable private rentals has ballooned
Landlord possession actions through the courts also increased significantly, the latest figures show.
When compared with the same quarter in 2021, landlord possession claims increased from 14,436 to 20,460 – marking a 42% rise.
Looking actions by landlords, warrants and repossessions roughly doubled compared with a year earlier, increasing by 103% and 98% respectively.
The median average time from a claim to a landlord possession fell to just under 22 weeks, from just over 42 weeks in the same period in 2021.
Matt Downie, chief executive of charity Crisis, said: “The devastating impact of the cost-of-living crisis, rising rents and low wages has once again been laid bare as thousands more renters are faced with eviction and the very real threat of being left with nowhere to go.”
Polly Neate, chief executive of Shelter, said: “The chronic lack of social homes means the demand for overpriced and unstable private rentals has ballooned, and more people are being pitted against each other in the hunt for a home.”
She added: “‘No fault’ evictions are pushing too many people needlessly into homelessness and turning thousands of people’s lives upside down.”