The number of homeowners facing repossession increased in late 2024, but mortgage arrears appears to be on a "confirmed downward trend," reports a banking and finance industry body. UK Finance urges those worried about making payments to seek help from their lenders. In the last three months of 2024, repossessions were up 12% from the third quarter and 54% higher year-on-year, with 1,030 owner-occupied homes taken back. Buy-to-let property takings stood firm at 700, showing a 30% yearly rise.
However, arrears are now at 1.06% for home mortgages and 0.65% for rental properties. Some 92,170 homeowner mortgages were in arrears of 2.5% or more of the outstanding balance in the fourth quarter of 2024 – 2% fewer than both the previous quarter and the fourth quarter of 2023. For landlords, the drop was 3% quarterly and 7% annually with 12,610 buy-to-let mortgages in arrears. Despite recent repossession hikes, UK Finance notes these figures are much lower than historical averages.
The final quarter of 2024 saw total home repossessions drop by 87% compared to the 13,200 witnessed in the first quarter of 2009. This figure is also 13% lower than the 1,990 seen in the fourth quarter of 2019, just before the coronavirus pandemic hit. Mortgage arrears levels are currently around half of what they were following the financial crisis of the late 2000s. In the first quarter of 2009, the number of homeowner and buy-to-let mortgages in arrears stood at 209,600 – a figure that is now just over half.
UK Finance has reassured that mortgage lenders continue to offer tailored support to anyone struggling with their mortgage payments. They urge anyone worried about their mortgage payments to contact their lender as soon as possible to discuss available options. During the most recent quarter, the number of homeowner and buy-to-let mortgages in early arrears fell, according to UK Finance. However, they also noted that this decrease partly reflects some customers who were previously in lighter arrears positions moving into more serious arrears bands.
UK Finance emphasised that lenders always aim to ensure customers remain in their homes and repossession is considered a "last resort". Lenders conduct affordability stress tests to help ensure borrowers can keep up with their mortgage payments, even if their interest rate increases above the rate that was in place when they first took out their mortgage. Charles Roe, director of mortgages at UK Finance, commented: "The number of mortgages in arrears has seen a slight decrease compared to the previous quarter.
"Having peaked in (the first quarter of) 2023, arrears appear to now be on a confirmed downward trend. This reflects the fact that, while pressures remain, the challenges of higher interest rates and cost-of-living increases have begun to ease. "This is good news for customers, but we know that this will not be the case across all households, and lenders will support anyone who might be struggling. Lenders offer a range of support to anyone worried about their finances. If you’re worried about your finances, please reach out to your lender as soon as possible to discuss the help available. Doing so won’t affect your credit score.".
StepChange Debt Charity’s figures show a rise in the average amount of mortgage arrears among its clients struggling with problem debt, with average mortgage arrears rising by 82% annually, to reach £11,845 in the fourth quarter of 2024. Richard Lane, chief client officer at StepChange Debt Charity, said the decline in UK homeowner mortgages in arrears offers “some reassurance for homeowners”.
He added: “Yet the effect of high rates and wider cost-of-living pressures has had a serious impact on some households. "Our data shows a huge jump in the average amount of mortgage arrears new StepChange clients are presenting with, which will make their debt problems much more difficult to overcome. For these mortgage holders, the problem is acute. "If you’re having trouble keeping up with mortgage payments, or are concerned about debt, don’t hesitate to contact your creditors for assistance. Mortgage lenders are required to help borrowers facing challenges and might offer forbearance options. Additionally, StepChange provides free and impartial debt advice, including guidance on mortgage debt, for those who are struggling.".
