In the first quarter of 2019, there were 76,580 homeowner mortgages in arrears of 2.5 per cent or more of the outstanding balance, 4 per cent fewer than in the same period last year, data from UK Finance revealed.

This trend continued when assessing homeowner mortgages with more significant arrears – 10 per cent or more of the outstanding balance – as there were 23,520 in Q1 2019, 3 per cent less than Q1 2018.

According to UK Finance, the propoprtion of homeowner mortgages in arrears remains at historically low levels, with the majority of borrower continuing to repay their mortgages in full and on time each month.

However, while residential mortgage arrears improved over the 12-month period, the number of buy-to-let mortgages in arrears of 2.5 per cent or more of the outstanding balance grew by 3 per cent to 4,620. Within this total, there were 1,200 buy-to-let mortgages with more significant arrears of 10 per cent or more, representing a 12 per cent growth in the number when compared to Q1 2018.

However, the association highlighted that, depsite seeing mixed signals from buy-to-let arrears, it does not indicate a clear increasing trend at this stage, particularly while increases are small and from a low base.

During the quarter, UK Finance reported that 1,380 homeowner mortgaged properties were taken into possession, a significant 10 per cent increase on the number recorded in the first quarter of 2018. Although, the figure is still well below the levels seen between 2009 and 2014.

The growth this year has been driven in part by a backlog of historic cases which are being processed in line with the latest regulatory requirement. Furthermore, lenders have continued to display flexibility to borrowers in financial difficulty and only resort to repossession as a last resort.

When looking at buy-to-let mortgaged properties, there were 570 taken into possession in the first quarter of 2019, with the figure falling by a substantial 14 per cent compared to the same period last year.

Commenting, Bluestone Mortgages director of sales and marketing Steve Seal said: “Although mortgage arrears remain at near record lows, it is paramount that the industry does more to show borrowers where financial help is available should they need it.

“An unexpected life event such as an illness, accident or divorce may take a toll on a borrower’s finances – including their monthly repayments and credit score. Many could find that high-street lending will be at arm’s length when it comes to remortgaging, and a ‘computer says no’ response is likely to make them feel they could be denied elsewhere. Why wouldn’t they think that? After all, most high street lenders do little to point them in the right direction of where else to look.

“It’s clear to see why these individuals may feel discouraged. However, there are specialist lenders out there who cater to those going through financial difficulty and understand mortgage arrears are usually the result of a one-off event – not a repeat event. Specialist lenders recognise these complexities and offer tailored solutions to fit each borrower’s circumstances, reassuring customers in turn that there is, in fact, affordable lending available.”

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