Mortgage Arrears Fall In The Fourth Quarter

The latest figures from UK Finance have revealed that there were a total of 79,620 homeowner mortgages in arrears mortgage payments at the end of 2021, which is 750 fewer than compared to the figures from the previous quarter.

It was found that there were 26,850 mortgages in early arrears – between 2.5 and five per cent of the balance in arrears – which is a decrease of two per cent on the previous quarter, and 14 per cent fewer than Q4 2020.

However, the trade association said that the number of homeowners with more significant arrears – 10 per cent or more of outstanding mortgage balances – has increased.

In total there were 30,010 mortgage holders in this position, 350 more cases than the previous quarter. While this does represent an overall rise since the first quarter of 2020, the rate of increase has, in fact, slowed.

The covid payment deferral options that were available at the time may well have proved beneficial for those already in deep arrears before the pandemic, UK finance observed. However, it is likely that they will need continued support in the future.

According to the figures, there were a total of 6,101 buy-to-let mortgages in arrears in Q4 2021, which is an increase of two per cent on the previous quarter, but one per cent down on Q4 2020.

As for repossessions, the figures indicate a total of 390 homeowner mortgaged properties and 320 buy-to-let mortgaged properties repossessed during Q4 2021.

According to UK Finance, these year-on-year comparisons will look unusually large due to the ‘Possession Moratorium’ from March 2020 to April 2021, during which no enforced repossessions took place.

Commenting, Equifax’s chief data and analytics officer Paul Heywood said that while they are encouraging, there are dangers to be aware of.

He said it was thanks in part to the emergency consumer protections such as furlough and mortgage payment holidays that prevented far fewer homeowners from falling into arrears, and the low level of mortgage arrears seen today is likely due to homeowners taking advantage of lockdowns to help accumulate savings and protect themselves against future income shocks.

“That picture, however, is quickly changing. Prices are rising, interest rates are creeping up, and unless wages keep pace, most borrowers will see their finances squeezed over the coming months,” he was quoted by Mortgage Strategy as saying.

Mr Heywood said that according to data from Equifax, these financial pressures are already leading to increasing numbers of people falling behind on loan payments in the consumer credit and automobile finance sectors, and he expects mortgage arrears to follow suit soon.


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For more information about any of our services, or if you have any questions about arrears mortgage payments, get in touch by calling us on 0203 3939 222.

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