Key information

• The number of homeowner and buy-to let (BTL) mortgages in arrears has risen in line with UK Finance's previously issued mortgage market forecasts.
• Homeowner mortgages in arrears increased seven per cent to 93,680 compared to the previous quarter. Buy-to-let mortgages in arrears increased 18 per cent to 13,570 compared to the previous quarter.
• 540 homeowner mortgaged properties were taken into possession in Q4, down 14 per cent on the previous quarter. 500 buy-to-let mortgaged properties were taken into possession in Q4, 11 per cent greater than the previous quarter.
• Support is available for anyone struggling with their mortgage payments. Anyone concerned about their finances should Reach Out to their lender to discuss the options available. Talking to your lender about the options will not impact your credit score.

UK Finance’s latest quarterly arrears and possessions data shows an increase in arrears for both homeowner and BTL mortgages, in line with previously issued forecasts. The increase in arrears is driven by the combined impact of cost-of-living pressures and higher interest rates.

In recent months mortgage rates have been falling. This will help ease the payment shock for the 1.5 million homeowners and 230,000 BTL mortgage holders whose fixed rate deals are due to end this year.

Lender stress tests have also helped ensure that borrowers are able to keep up with their mortgage payments, even when their interest rate rises above those in place when they first took out their mortgages. However, we know that other factors outside the control of lenders can also impact customers’ ability to manage their mortgage payments, so we would encourage anyone worried about their finances to reach out to their mortgage lender at the earliest opportunity to discuss the options available for their circumstances.

Meanwhile, the number of possessions remains very low. Possession is only ever a last resort and after other options have been explored. Across BTL and homeowner mortgaged properties, a total of 1,040 were repossessed in Q4 2023. This compares with nearly 2,000 in Q4 2019 before the pandemic.

Eric Leenders, Managing Director of Personal Finance, UK Finance, said:

The number of mortgage holders in arrears, whilst still low, is continuing to rise as the cost of living and high interest rates take their toll on households. Importantly, help is available to anyone worried about their finances – please reach out to your lender as soon as possible to discuss the support options available. Lenders have teams of trained experts ready to help. Contacting your lender to find out what support is available won’t affect your credit score.