UK Finance’s latest Mortgage Arrears and Possessions Update for the first quarter of 2018 reveals that:

  • There were 78,800 homeowner mortgages in arrears of 2.5 per cent or more of the outstanding balance in the first quarter of 2018, 8 per cent fewer than in the same quarter of the previous year and the lowest level since records began in 1994.
  • Within the total, there were 24,100 homeowner mortgages with more significant arrears (representing 10 per cent or more of the outstanding balance). This was 3 per cent fewer than in the same quarter of the previous year.
  • There were 4,500 buy-to-let mortgages in arrears of 2.5 per cent or more of the outstanding balance in the first quarter of 2018, 6 per cent fewer than in the same quarter of the previous year.
  • Within the total, there were 1,100 buy-to-let mortgages with more significant arrears (representing 10 per cent or more of the outstanding balance).

1,200 homeowner mortgaged properties were taken into possession in the first quarter of 2018, unchanged from the same quarter of the previous year.

Jackie Bennett, Director of Mortgages at UK Finance, commented:

“The number of mortgages in arrears is at its lowest level since records began while possessions remain at a historic low.

“This has been helped by low interest rates and lenders supporting borrowers through periods of temporary financial difficulty wherever possible.

“However, the recent change to Support for Mortgage Interest (SMI) from a benefit to a loan, as well as potential pressure on households from a future base rate rise, risk causing a reversal of this trend as the year goes on.

“Only a small minority of those eligible for the SMI loan have taken it up so far. Lenders will proactively help borrowers in receipt of Support for Mortgage Interest (SMI) to see if there are other ways to make up their payments if they do not want to take out the loan.

“As ever, customers should not hesitate to contact their lender if they anticipate any payment problems and want to discuss what options are available.  Repossession is always a last resort.”

Notes to Editor

  1.  UK Finance is a trade association 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 most of the 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
  2. The data shown are for first charge mortgages only. Figures are reported by most UK Finance mortgage members and presented here on a grossed-up basis from that sample to reflect total market size.
  3. 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.
  4. 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.
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Mortgage arrears at record low in Q1 2018