The total number of households in arrears fell by 3 per cent in the third quarter of the year, data from UK Finance has revealed.
The Mortgage Arrears and Possessions Update reported there were 93,630 homeowner mortgages in arrears of 2.5 per cent or more of the outstanding balance in the third quarter of 2024.
This represented a decrease on the 96,090 households in arrears that was recorded in the second quarter of 2024.
However, the most recent figure represents an increase on the 87,010 households in arrears that was recorded in the third quarter of 2023.
Target Group sales and growth lead, Melanie Spencer, said: “Following an unchanged picture last quarter, it is great to see the number of arrears cases now reducing.
“With the first base rate cut helping to start this positive momentum, the hope is that a similar decision today will sustain this and we see borrowing pressures continuing to ease and cases reducing further.
“There are still real difficulties though and lenders mustn’t forget those borrowers stuck in sizable arrears.”
Spencer added that, at more than 10 per cent of the balance in arrears, homeowners and landlords facing these difficulties have “very little movement” and so need “urgent” support from lenders.
In supporting these customers, she argued lenders need the right systems in place to manage this process proactively and provide a much needed resolution for the borrower and for the lender too.
“From our own experience working with lenders, we know that repossession is always the very last tool they use,” she explained.
“It’s encouraging to see today that they still make up a very small proportion of the overall borrowers and properties in arrears.
“Early contact and remediation is absolutely key in keeping repossession a last resort and achieving better outcomes for all parties.”
UK Finance also revealed there were 13,000 buy-to-let mortgages in arrears of 2.5 per cent or more of the outstanding balance in the third quarter of 2024.
This was 4 per cent fewer than in the previous quarter.
Within this total, there were 5,070 buy-to-let-mortgages in the lightest arrears band (representing between 2.5 and 5 per cent of the outstanding balance).
This represented a fall of 10 per cent on the previous quarter.
tom.dunstan@ft.com
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