Mortgage arrears figures remain low

Latest figures from UK Finance have indicated that there was a  slight annual increase in mortgage arrears in Q1 of 2021.

However, the figures show that the levels remain close to historically low rates.

The number rose by 230 in the first quarter to a total of 77,640 homeowners with mortgage arrears of 2.5% or more.

Within the total, there were 28,100 homeowner mortgages in early arrears, between 2.5% and 5% of balance in arrears, a decrease of 1% on the previous quarter.

UK Finance says the low number of arrears is a direct result of payment deferrals and other tailored forbearance.

From March 2020 to 31 March 2021, lenders offered payment deferrals of up to six months to customers and buy-to-let landlords where Covid-19 had impacted their ability to meet their monthly mortgage payments, with almost 2.9 million granted while the scheme was active.

UK Finance Managing Director of Personal Finance Eric Leenders said While there was a slight rise in total arrears in Q1 2021 compared to the historic low levels seen before the pandemic, the additional support from lenders has helped many mortgage customers stay out of arrears.”

“With the economic impact of Covid-19 continuing to be felt, we anticipate there will be further increases in mortgage arrears during 2021. Any customer who is concerned about their finances should contact their lender early to discuss the options and tailored support available to them.”