You are here: Home - News -

UK Finance expects rising arrears and repossessions

by:
  • 23/04/2018
  • 0
UK Finance expects rising arrears and repossessions
UK Finance director of mortgages Jackie Bennett has warned levels of arrears and repossessions are expected to grow this year, as interest rate rises and government benefit cuts hit borrowers.

Speaking at the UK Finance annual mortgage lunch, Bennett noted that arrears were at a historic low in 2017 with 89,000 people with arrears balances of 2.5% or more of their outstanding mortgage.

However, she warned that the trade body is expecting those numbers to increase this year as some households come under pressure from base rate rises and others will be affected by the changes in Support for Mortgage Interest (SMI).

Bennett highlighted that of the 90,000 eligible SMI claimants, the vast majority had not yet applied to convert their benefit into a loan.

“UK Finance has been coordinating efforts with lenders, debt advice charities and others to try to ensure recipients are made aware of the changes and take action. We have also been liaising closely with the government,” she said.

“Lenders have been contacting customers and discussing options with them for making up the payments if they do not want to take out the loan.

“However, that’s not an option for everyone and unfortunately some may fall into arrears. Repossession is always a last resort and we will continue to monitor the situation closely over the remainder of the year,” she added.

 

Long-term fixes and modest growth

Bennett also revealed that longer term fixes were becoming far more popular and that sustained modest growth was expected for the market.

“So far this year nearly half of new fixed rate business has been at five years or more, compared to around a third over the last few years,” she said.

Bennett continued: “We expect gross lending to be around £260bn in 2018, the highest figure for a decade.  And we expect that to grow modestly in 2019 too, to around £271bn.

“This is not back to the level of the heady days of the mid-2000s –  which is probably a good thing,” she added.

There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.

Profiles

Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.

Marketwatch

Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.

Poll

Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
Read previous post:
The 10 biggest mortgage broker stories this week – 20/04/18

Readers this week took heed of a warning over the leasehold 'minefield' from Bob Hunt of Paradigm Mortgage Services.

Close