Analysis: Mortgage arrears decrease as payment holidays end

Mortgage arrears and possessions remained low in the second quarter of 2020 as over two million mortgage payment deferrals have been approved, latest UK Finance arrears data shows.

Just under one million mortgage payment holidays are still in place as borrowers begin to resume monthly payments after payment breaks come to an end.

There were 73,580 homeowner mortgages in arrears in Q2, which is three percent lower than the same quarter in 2019.

The data also showed that there were 5,000 buy-to-let mortgages in arrears of 2.5 percent or more of the outstanding balance in Q2. This is six percent greater than Q2 2019. Within this, there were 1,270 buy-to-let mortgages with more significant arrears, which is five percent greater than the same period the year before.

Some 90 homeowner mortgage properties and 130 buy-to-let mortgaged properties were taken into possession in the second quarter of 2020. This is 93 percent and 80 percent fewer, respectively, than Q2 2019.

Following the industry moratorium on involuntary possessions, according to UK Finance, these low possessions numbers in Q2 reflected cases where the customer requested the possession to go ahead or where the property was vacant.