Mortgage arrears climb as landlords and homeowners struggle

The number of homeowners and landlords falling behind with mortgage payments has jumped, according to UK Finance.

The trade body for lenders says that there were 13,570 buy-to-let mortgages in arrears compared to the previous quarter.

UK Finance said the rise in arrears is driven by cost-of-living pressures and higher interest rates.

More and more landlords falling into arrears

Homeowners are also finding it difficult to keep up with mortgage payments with 93,680 homeowner mortgages in arrears, 7% more than the previous quarter.

Alastair Douglas, the chief executive of TotallyMoney, told Sky News: “The latest figures show that more and more homeowners and landlords are falling into arrears, and we can expect the trend to continue as 1.7 million cheap fixed-rate deals come to an end this year.

“If you’re somebody who’s struggling, contact your lender and ask for support – and remember this won’t impact your credit rating.

“However, missed payments can – and they could stay on your credit file for up to six years. If these persist, you might end up in mortgage arrears, leading to court action and even repossession.”

High interest rates take their toll on households

However, UK Finance said the number of re-possessions remains very low. 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 from 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.”

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