ByThe amount of mortgages in arrears is at its highest level for almost seven years as increasing numbers of borrowers struggle to meet repayments, according toThe total arrears on home loans jumped by 28.8 per cent over the past year to £16.9bn, the highest amount since 2016, Bank data showed. Home loans with arrears now account for just over 1 per cent of outstanding mortgage balances.
Increased mortgage arrears come despite government pressure on major lenders to ensure their customers are aware of theAnalysts blamed the increase on the sharp rises in mortgage rates over the past two years. Simon Gammon, a managing partner at Knight Frank Finance, said that despite the “sizeable jump” in arrears, the proportion of outstanding mortgage arrears remained low.
He explained: “That’s because the vast majority of outstanding mortgages were issued under the post-global financial crisis regime, which was much more stringent when it comes to affordability. “While mortgage payments at today’s rates are painful and require borrowers to cut their discretionary spending, they are still technically affordable. That is going to keep arrears low despite steep increases in mortgage rates.”
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