Even if the cost of new loans has decreased from what it was in the late summer, borrowers who are having trouble making their payments are advised to speak with their lender now rather than waiting to fall behind.
For the last three months of 2023, UK Finance reported that pressures from rising interest rates and the cost of living continued to have an impact on borrowers. While payments increased in line with projections, a growing number of borrowers fell behind.
According to its figures, homeowner mortgage arrears rose to 93,680 over the previous quarter, a 7% increase.
Buy-to-let (BTL) mortgages increased by 18%; these mortgages were also determined to be more than 2.5% behind the remaining loan balance.
Although the number of homeowner-mortgaged properties taken into possession fell by 14% to 540 over the time, according to UK Finance, the number of properties in the BTL category increased to 500.
According to the body, these volumes were modest by historical standards.
In comparison to the same period last year, mortgage possession claims increased by 39% to 4,384 during the course of the three months, according to separate numbers from the Ministry of Justice.
While the number of orders granted increased by 9% to 2,702, county court bailiff repossessions decreased by 19%.
One in four mortgage holders, according to research released on Thursday by the debt charity StepChange, may have used credit to make mortgage payments in the previous year.
Since the Bank of England took action to combat inflation in December 2021—which had spiked as economies recovered from the COVID outbreak and loosened restrictions—borrowing prices have increased.
But in an attempt to address some of the living expense crisis that followed Russia’s invasion of Ukraine, the central bank raised the bank rate 13 more times in a row.
