The number of mortgages in arrears of 2.5% or more of the
outstanding balance declined to 88,200 in the second
quarter of this year, the lowest level since at least 1994
when this run of data began. The total was 5% lower than in
the first quarter (92,600) and amounted to 0.8% of the more than
11 million mortgages outstanding in the UK.
The second quarter also saw a fall in the number of
mortgages across all arrears bands, including those with the
highest levels of arrears. In the same period, the number
of mortgages with arrears of 10% or more of the outstanding
balance totalled 25,200, down 5% from 26,500 in the preceding
quarter. This brought a welcome end to a period of
five successive quarters in which this figure had edged upwards
from 23,400 in the first quarter of 2016.
Chart 1: Arrears on mortgages, 2.5% or more of
balance outstanding
Source: UK Finance
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data
The number of properties taken into possession also
declined in the second quarter from 1,900 to 1,800
(accounting for 0.02% of all mortgages). The total was the
same as in the final quarter of last year, and is the lowest
figure since quarterly data was first published in 2008.
Chart 2: Number of possessions, owner-occupied and
buy-to-let markets
Source: UK Finance
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data
In line with a trend that has become established in recent
data, the rate of buy-to-let arrears was lower than arrears in
the owner-occupied sector, although the buy-to-let possession
rate was higher. This is because lenders extend a high
level of forbearance to owner-occupiers to help them overcome any
period of financial difficulty and stay in their
homes wherever possible.
Chart 3: Arrears by bands as a proportion of total
balance
Source: UK Finance
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data
Commenting on the data, UK Finance head of
mortgages Paul Smee said:
"These figures show that the overwhelming majority of
borrowers are managing their mortgage payments successfully,
and many of those who have experienced some difficulty
in the past are able to recover their financial position.
The recent improvement in the number of mortgages with high
levels of arrears is particularly welcome.
"Borrowers are being helped by low interest rates, but
mortgage costs are certain to rise at some stage. It is
important therefore for customers to plan ahead and
consider how their finances would be affected in those
circumstances. As ever, lenders will continue to help
borrowers resolve any financial difficulty if possible, so
customers should not hesitate to contact their lender if they
anticipate any payment problems."
Notes to Editor
-
UK Finance is a new trade association which was
formed on 1 July 2017 to represent the finance and banking
industry operating in the UK. It represents around 300 firms in
the UK providing credit, banking, markets and payment-related
services. The new organisation brings together activities
previously carried out by the Asset Based Finance Association,
the British Bankers’ Association, the Council of Mortgage
Lenders, Financial Fraud Action UK, Payments UK and the UK
Cards Association.
-
Due to a change in methodology to compile
arrears and possession data, to improve the quality of results,
there is a break in the data series between the first and
second quarters of 2014. The figures are, however, directly
comparable back to the second quarter of 2014.
-
Arrears and possessions figures are for the UK
as a whole. There is no breakdown of data for English
regions or for individual countries in the UK.
-
The Ministry of Justice’s mortgage and landlord
possession statistics can be found on the gov.uk website. These include quarterly national statistics
on possession claim actions in county courts by mortgage
lenders and social and private landlords.
