6th Feb 2025 10:56
(Alliance News) - The number of homeowners in the UK having their property repossessed increased towards the end of 2024, but mortgage arrears now appear to be on a "confirmed downward trend," according to a banking and finance industry body.
UK Finance, which released the figures, encouraged borrowers who are concerned about their ability to keep up with their payments to reach out to their lender for support.
Its figures show 1,030 homeowner-mortgaged properties were repossessed in the fourth quarter of 2024, which was 12% higher than in the previous quarter and 54% higher than the same period a year earlier.
Meanwhile, 700 buy-to-let mortgaged properties were repossessed in the fourth quarter of 2024, which was unchanged from the previous quarter and 30% higher than the same period a year earlier.
The overall proportion of mortgages in arrears remains low, UK Finance said, at 1.06% of homeowner mortgages and 0.65% of buy-to-let mortgages.
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.
Among landlords, 12,610 buy-to-let mortgages were in arrears of 2.5% or more of the outstanding balance in the fourth quarter of 2024 – a 3% decrease compared with the previous quarter and 7% lower compared with the fourth quarter of 2023.
UK Finance emphasised that while home repossessions have increased, the overall numbers remain significantly lower than long-term averages.
Total home repossessions in the fourth quarter of 2024 were 87% lower than the 13,200 seen in the first quarter of 2009 and 13% lower than the 1,990 seen in the fourth quarter of 2019, just before the coronavirus pandemic.
Mortgage arrears levels are at around half the levels seen in the aftermath of the late 2000s financial crisis.
The number of homeowner and buy-to-let mortgages in arrears in the first quarter of 2009 stood at 209,600 – just over twice the number currently in arrears.
UK Finance said mortgage lenders continue to offer tailored support to anyone struggling with their mortgage payments and anyone worried about their mortgage payments should reach out to their lender as soon as possible to discuss the options available.
During the latest quarter, the number of homeowner and buy-to-let mortgages in early arrears fell, UK Finance said.
But it added that the decrease also partly reflects some customers who were previously in lighter arrears positions moving into more serious arrears bands.
UK Finance said lenders will always seek to ensure customers remain in their homes and repossession is a "last resort".
Lenders carry out 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, said: "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."
By Vicky Shaw, PA Personal Finance Correspondent
Press Association: Finance
source: PA
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