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Mortgage arrears levels rocket 44% over 12 months

Mortgage arrears levels rocket 44% over 12 months
Christina Hoghton
Written By:
Christina Hoghton
Posted:
12/06/2024
Updated:
12/06/2024

Despite the sharp rise, just 1.28% of mortgage balances are currently in arrears, according to the Bank of England.

It said that the value of outstanding mortgage balances with arrears increased by 4.2% in the first quarter of 2024 compared to the last three months of 2023 to reach £21.3bn. That’s 44.5% higher than a year earlier.

The proportion of the total loan balances with arrears, relative to all outstanding mortgage balances, increased on the quarter from 1.23% in Q3 2023 to 1.28% in Q1 2024, its highest level since 2016.

The bank noted that new arrears cases actually fell by two percentage points from the previous quarter, to 11.4% of the total outstanding mortgage balances with arrears, and this was 4.7 percentage points lower than a year earlier.

Abigail Fernandes, analyst at Pepper Advantage, said: “Mortgage arrears balances are still high but growth is slowing, according to the Bank of England this morning. This follows arrears hitting a seven-year high in the final quarter of 2023.

“The state of the housing and mortgage markets is not the same across the whole of the UK, with disparity between regions. We found that the arrears growth rate increased during Q1 for both the North East and North West regions while it decreased in other areas, including the South East and Greater London.

“Even with green shoots appearing, the economic picture remains complex, and certain groups remain under pressure and will likely require support for some time.”

Related: Arrears and repossessions rose in first three months of 2024