New data from UK Finance for Q3 2024 shows a slight reduction in mortgage arrears for both homeowners and buy-to-let investors, while possession rates remain well below long-term averages. Lenders continue to extend tailored support to customers facing financial challenges, encouraging those struggling with payments to seek early assistance.
Decline in mortgage arrears
The latest report from UK Finance reveals a 3% drop in homeowner mortgage arrears, with 93,630 cases recorded in Q3 2024 compared to Q2. Buy-to-let (BTL) mortgages in arrears also saw a 4% decrease, with 13,000 cases recorded. Currently, only 1.08% of homeowner mortgages and 0.67% of BTL mortgages are in arrears, indicating a relatively low rate of defaults.
Early-stage arrears have also decreased, with homeowner arrears falling by 5% and BTL by 10%. UK Finance notes this trend suggests that fewer new customers are entering arrears, although some who were already in minor arrears have transitioned to more serious levels. This data highlights the impact of ongoing lender support in helping customers manage rising costs and maintain their mortgage payments.
Possessions remain below historic levels
Possession figures remain low, with 1,700 properties (990 homeowner and 710 BTL) taken into possession in Q3 2024. This number is 15% lower than pre-pandemic levels seen in Q4 2019 and significantly lower than the peak of 13,200 possessions recorded during the 2009 financial crisis. UK Finance emphasises that repossession remains a last resort, pursued only after all other options have been explored with the borrower.
Continued lender support for borrowers
Eric Leenders, Managing Director of Personal Finance at UK Finance, noted the importance of lender assistance, particularly for households still feeling the strain of rising costs. “The number of mortgages in arrears has seen a slight decrease compared to the previous quarter, which is good news following increases over the past year,” Leenders said. “This reflects the fact that, while many households remain under pressure, the challenges of higher rates and the cost of living have begun to ease.”
However, Leenders also acknowledged that not all households are in the same position and encouraged early communication with lenders for anyone struggling financially. “Lenders offer a range of support to anyone worried about their finances. Please reach out to your lender as soon as possible to discuss the help available if you have any concerns. Doing so won’t affect your credit score,” he added.
