The total number of UK mortgages in arrears saw a slight increase of 3% in Q1 compared to the previous quarter, new UK Finance figures have shown.

This rise, to 96,580, remained in line with the banking trade body’s forecasts, and was driven by the continued impact of cost of living pressures and higher interest rates.

UK Finance’s figures also showed that the number of buy-to-let (BTL) properties in arrears remained similar to the previous quarter, at 13,570.

The overall proportion of mortgages in arrears has remained low, at 1.11% of all homeowner mortgages in the UK, and 0.69% of BTL mortgages.

By comparison, the number of homeowner and BTL mortgages in arrears in Q1 2009, the peak in arrears numbers during the global financial crisis, was 209,600 – almost twice the 110,150 recorded in the opening quarter of this year.

Director of mortgages at UK Finance, Charles Roe, said: “The number of mortgages in arrears, while still low, continues to rise as households remain under pressure from the cost of living and higher interest rates.”

While the percentage of mortgaged properties taken into possession also saw an increase in Q1, UK Finance highlighted that this was largely due to historic arrears cases now working through the court system.

The banking body suggested that the number of possessions remains “very low compared to historic norms”.

A total of 1,470 homeowner and BTL mortgaged properties were possessed in Q1, a figure that was 26% lower than the 1,980 recorded in Q1 2019, before the pandemic, and 89% lower than the 13,200 seen in Q1 2009 – the peak of the previous possessions cycle during the financial crisis.

Chief data and analytics officer at Equifax UK, Paul Heywood, added: “Although mortgage approvals ticked up in March, arrears kept rising in the same month, marking the fourteenth increase in the past 15 months.

“Average mortgage repayment growth plateaued earlier in the year, but those hoping to jump on the housing ladder should expect high rates until at least September when markets predict the Bank of England’s first rate cut in over a year.

“This will leave many households weathering high borrowing costs for the foreseeable future. Consumers must not suffer in silence.”

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