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Arrears remain low as 140,000 mortgage payment holidays still in place 

Over 2.6 million mortgage payment deferrals have been approved to date, with just under 140,000 still in place at the end of October, latest data from UK Finance shows. 

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There were 74,850 homeowner mortgages in arrears of 2.5% or more of the outstanding balance in the third quarter of 2020, which was five percent greater than Q3 last year.

 

There were 24,860 homeowner mortgages in "significant arrears" - meaning the homeowners’ arrears were over 10% of the balance owed. Those with less serious arrears, where their arrears were less than 5% of the balance owed, declined in Q3 2020 as lender support has helped borrowers keep up with payments.

 

Overall, arrears levels in 2020 remain near to the historically low levels in the last three years, as a result of pandemic support.

 

There were 5,400 buy-to-let mortgages in arrears of 2.5% or more of the outstanding balance due in the third quarter, 19% greater year-on-year.

 

Within the total, there were 1,350 buy-to-let mortgages with more significant arrears (representing 10% or more of the outstanding balance).

 

Some 160 homeowner mortgaged properties and 230 buy-to-let mortgaged properties were taken into possession in the third quarter of 2020, 88% and 71% fewer, respectively, than in the same quarter of 2019.

 

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

 

Mortgage arrears and payment deferrals will be discussed at next week’s Lending Summit.

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