Thousands of homeowners have been warned about mortgage arrears, as new figures show huge numbers are struggling to make repayments. Higher interest rates and the rising cost of living have left many households unable to find enough money to keep a roof over their heads.
Figures show that more than 115,000 mortgages are at least two months in arrears, including nearly 11,000 in the West Midlands who owe a total of almost £97 million in missed payments. If you are struggling with payments and fear further rises could leave you in serious trouble, you are being urged to check out fixed deals where possible.
As of September 19, 2024, the interest rate is 5 per cent. The Bank of England’s Monetary Policy Committee (MPC) left interest rates unchanged from the decision made at a previous meeting in August when it reduced rates for the first time since the pandemic. Some predict that rates will fall by the end of 2024 to 4.75 per cent and that rates could drop to 4 per cent by the end of 2025, but those who are looking for more financial certainty and are at risk of plunging into debt are being advised to explore fixed deals.
Experts are urging people to speak to their lender if they are either in arrears or in danger of defaulting on repayments because of other rising costs eating into the household budget. Latest figures show a north-south divide in mortgage arrears, which have been steadily climbing as interest rates have risen sharply from record lows in recent years.
Rachel Hunnisett, director of mortgage distribution at April Mortgages, said: “The number of UK homeowners falling into arrears is on the rise and these latest figures show clear evidence of a north-south divide. Homeowners in parts of northern England and Wales seem to have been disproportionately affected by the combination of rising living costs and higher mortgage rates.
“Although inflation has fallen this year, the cost of living is still increasing and households without spare disposable income or significant savings to fall back on are finding it harder to maintain their mortgage repayments. Interest rates may have passed their peak, but many homeowners are paying more for their mortgage than they were in recent years and this is causing borrowers greater stress.
“If you’re concerned about rising interest rates, opting for a longer-term fixed-rate mortgage can offer peace of mind and financial stability. Locking in a fixed rate for 5, 10, or even 15 years means your monthly payments will remain predictable, regardless of how the market fluctuates. This can be especially valuable in a volatile economic climate and help to ensure that borrowers are not only able to afford their home but keep it too.
“If anyone is finding it difficult to keep up with their repayments, speak to your lender as early as possible about the options open to you to reduce the risk of falling into arrears.”
UK mortgage arrears
Most recent figures on mortgages in arrears provided by the Financial Conduct Authority (FCA)
Region – Number of mortgages at least two months in arrears – Share of the total – Current total payment shortfall (£)
West Midlands: 10,777, 1.43% £96,763,768
East Midlands: 8,339, 1.18%, £74,646,256
North East: 6,393, 1.76% £47,706,455
North West: 16,531, 1.60%, £155,711,451
East of England: 8,571, 0.98%, £124,987,723
Yorkshire & Humber: 11,593, 1.50%, £89,067,309
Greater London: 13,794, 1.29%, £1,167,719,162
South East: 8,884, 0.99%, £206,730,720
South West: 9,403, 0.86%, £151,235,386
Scotland: 9,895, 1.28%, £102,804,788
Contact one of our highly experienced mortgage advisors today on 0121 500 6316 to discuss your mortgage needs.
