Photo by Mortgage Arrears Reach Highest Level Since 2014: What Does It Mean for Homeowners?
The latest figures from the Bank of England have revealed that the total value of outstanding mortgage balances with arrears has reached its highest level since 2014. This is a concerning trend for homeowners, particularly those who are struggling to make their monthly payments.
According to the data, the value of outstanding mortgage balances with arrears increased by 4.2% in the first quarter of 2024, reaching £21.3 billion. This represents a 44.5% annual increase and the highest level since the third quarter of 2014.
The proportion of total loan balances with arrears has also increased to 1.28%, the highest level since the fourth quarter of 2016. While this figure is still relatively low, it is a worrying trend for policymakers and homeowners alike.
“The proportion of the total loan balances in arrears is still relatively low at 1.28%, though Bank of England policymakers will be watching this data closely,” says Simon Gammon, managing partner at Knight Frank Finance.
Mortgage rates are currently trading sideways, but are expected to ease once the timing of the Bank of England’s first cut to the base rate becomes clearer. This could provide some relief to homeowners who are struggling to make their payments.
For those who are concerned about falling behind on their mortgage payments, it is essential to contact their lender as early as possible. Many lenders have signed up to a mortgage charter, which offers a range of options for struggling borrowers, tailored to their needs.
As a homeowner, it is essential to stay on top of your mortgage payments and to seek help if you are struggling. With the right support and guidance, it is possible to get back on track and avoid falling into arrears.
In conclusion, the latest figures on mortgage arrears are a concern for homeowners and policymakers alike. While the proportion of total loan balances in arrears is still relatively low, it is essential to stay vigilant and to seek help if you are struggling to make your mortgage payments.
“Anybody concerned about falling behind on their mortgage payments should contact their lender as early as possible.” - Simon Gammon, managing partner at Knight Frank Finance
