According to the Bank of England, the UK witnessed a dramatic increase in residential mortgage arrears last year. The numbers hit a seven-year peak at £16.9 billion for the quarter ending June 2023—a staggering 28.8% rise year-on-year. This was the highest level since Q3 2016 and marked the largest annual percentage surge since 2019.
However, it’s essential to put this in context: while the increase in arrears is significant, it remains relatively low compared to the financial crisis of 2008-09.
These figures came in the wake of 14 consecutive interest rate hikes by the Bank of England over the previous two years, which caused a sharp uptick in mortgage rates.
Financial experts are predicting another rate hike of 0.25 percentage points in the near future, aiming to control inflation. Stay tuned for more updates and insights into what these trends mean for mortgage brokers and their clients.
