8.4 C
Lancashire
Sunday, June 16, 2024

Report Shows Growing Number of UK Homeowners in Mortgage Arrears

New research from LandlordBuyer has found that in the first quarter of 2024, 96,580 homeowner mortgages were in arrears of 2.5% or more of the outstanding balance. This marks a 3 per cent increase from the previous quarter. Out of these, 13,570 were buy-to-let mortgages in arrears.

The statistics also reveal that 870 homeowner mortgaged properties were taken into possession in the first quarter of 2024 – a 36 per cent increase from the previous quarter. Furthermore, 600 buy-to-let mortgaged properties were taken into possession during the same period – a 20 per cent increase from the previous quarter.

LandlordBuyer Managing Director, Jason Harris-Cohen, commented: “The impact of the cost of living on mortgage repayment affordability can’t be ignored. Although inflation has dropped to 2.3%, consumers are still reeling from its peak of 11.1% in October 2022. We also need to bear in mind that the price of goods, fuel and utilities are still rising – just at a slower rate.

“When you overlay inflation with mortgage rates, it isn’t a pretty picture. Borrowers are now resigned to the fact that home loans with 2% interest are a thing of the past and that rates of between 4-5% are the new normal. It has been especially painful for borrowers coming off fixed-rate deals. For many, their repayments doubled overnight – whether they went on the lender’s SVR or remortgaged to a new deal.

“For landlords, it has been a struggle to find a logical balance between effort in and profit out. Running a buy-to-let has never been more involved, with complex compliance and strengthening tenants’ rights. This is in tandem with zero mortgage interest tax relief, increasing running costs and arrears that have risen 24% in the year to April 2024.

“Jason explained that the number of owner-occupiers and buy-to-let borrowers who have fallen behind with mortgage repayments has been pretty much static since the start of 2021.

He added: “It’s a repeat story. Rent rises are outpacing wage growth, fuelling arrears, but rising mortgage costs are wiping out any profit a landlord may make. This has left many buy-to-let owners in the perilous situation of falling behind with mortgage repayments. In the worst cases, there is no other option but to surrender the property to the lender.

“As for the future, there was a glimmer of optimism that mortgage rates may dip below 4% during the remainder of 2024 but swap rates became more volatile and there has been flip flopping between small rate increases and decreases but nothing that would send borrowers rushing to the bank. We’re now watching what the run up to the General Election does to mortgage rates but we expect the full impact to take hold after 4th July.”

Sam Allcock
Sam Allcockhttps://businesslancashire.co.uk/
Sam Allcock is a highly regarded digital entrepreneur with over 20 years’ experience in online marketing for some of the World’s biggest brands. He has extensive knowledge and experience in SEO and digital marketing. He is based in Cheshire but has an interest in all things going on in the North West and enjoys contributing local news to the site.
spot_imgspot_img

Latest

Bespoke named Best Place to Work by The Sunday Times

Chorley-based digital marketing agency Bespoke has been named by the...

Sky Bet Bonus Code 50/1 England to Wear White – Get £50 Free Bets

New customers at Sky Bet this June, ahead of...

US Open: McIlroy and Cantlay share lead after round one

Rory McIlroy and Patrick Cantlay hold a share of...
spot_img

Subscribe to our newsletter

Business Lancashire will use the information you provide on this form to be in touch with you and to provide updates and marketing.

Don't miss

Chief executive to leave Lancashire County Council

The chief executive at Lancashire County Council is moving...

Trams return to Blackpool’s train station for the first time in 60 years

Passenger trams have linked up with Blackpool’s main train...

Childminder to be sentenced for killing baby in Hapton

A childminder is due to be sentenced on Thursday,...

College sustainability expert helps homeless charity save thousands on energy costs 

Nelson and Colne College’s sustainability expert has teamed up...

More News

9 Benefits of Outdoor Landscape Water Features

People have long been attracted to outdoor water features. These include ponds, waterfalls, and fountains. They are valued for their beauty and peaceful feeling....

Lease Options Mastery Academy Rolls Out Property Masterclass Webinar

Nicky Greer, the UK's record holder for property lease options with an impressive portfolio of 72 houses and flats, has launched an eagerly-awaited webinar...

Incspaces Pros and Cons on Virtual Offices

Virtual offices can be a great service for any business start-up, a way to show a professional image while protecting your personal information. What...