A growing number of homeowners and landlords fell into arrears with their mortgage in the second quarter of 2023, according to figures from a trade association.
UK Finance, which released the figures, said home repossessions are expected to rise, given ongoing cost-of-living challenges.
There were 81,900 homeowner mortgages in arrears of 2.5% or more of the outstanding balance in the second quarter of 2023, which was 7% higher than in the previous quarter.
Within the total, 28,690 homeowners had arrears in the most severe band of more than 10% of the mortgage balance, which was up by 2% compared with the previous quarter.
There were 8,980 buy-to-let mortgages in arrears of 2.5% or more of the outstanding balance in the second quarter of 2023, 28% higher than in the previous quarter.
Mortgages in arrears accounted for 0.93% of homeowner mortgages outstanding and 0.44% of buy-to-let mortgages outstanding in the second quarter of 2023, UK Finance said.
Some 610 homeowner mortgaged properties were repossessed in the second quarter of 2023, 19% fewer than in the previous quarter.
And 440 buy-to-let mortgaged properties were repossessed in the second quarter of 2023, which was 7% more than in the previous quarter.
A UK Finance spokesperson said: “The number of mortgage holders in arrears rose in (the second quarter) as higher mortgage rates and the cost-of-living continued to weigh on households.
“Although any rise in arrears can be worrying, overall numbers remain low with less than 1% of homeowners and less than half a per cent of landlords behind on their payments.
“Lenders have been preparing for any continuing increases in arrears, for example with the launch of the mortgage charter, and have already helped over 200,000 borrowers before they have got into financial difficulty by restructuring their repayments.
“The number of homeowner and buy-to-let possessions in (the second quarter) remain close to historic lows but are expected to continue to rise in line with our mortgage market forecast given the ongoing cost-of-living challenges.
“It’s important for homeowners and landlords to remember that there is support available to anyone struggling with their finances. If you think you might have difficulty making your mortgage payments, reach out to your lender early to find out the options available.”
