Of borrowers in the north, 4.4% were in arrears, compared with about 3.4% in the south in Q4 2011, a report from Standard & Poor’s (S&P) has shown.
The news comes at a time when northern regions are also struggling with lower employment rates and cuts to public services, said S&P.
The North West of England was worst affected by mortgage arrears, at 4.7% of mortgages. Yorkshire and Humber and the East Midlands followed close behind, at 4.4%.
The northern regions also suffered in terms of negative equity, accounting for over half of the increase between Q2 2010 and the end of 2011. Negative equity was above 11% in the North East and North West, compared to 3% in the South East.
London house prices were dramatically higher than all other regions, increasing by 6.7% year on year in Q4 2011 compared to a national average of 1%.
The report argued that northern regions were bearing the brunt of rising UK mortgage arrears.
It said: “While decreasing equity does not immediately reduce a borrower’s ability to service their debt, it tends to limit their ability to refinance – or sell the securing property – to clear their mortgage.
“Such borrowers can be vulnerable to interest rate rises, and may also have difficulty moving house to pursue employment opportunities.”