The value of residential mortgages written off by UK banks and building societies has increased from £77m to £122m in the space of a year, according to accountancy firm Moore Stephens.
The 58 percent rise in write-offs in the year to June 30, 2018, is the first since 2013/14.
More than a year since the Bank of England hiked interest rates from their historic low of 0.25 percent, trebling to the current 0.75 percent, there are concerns that the rate rise will have already affected homeowners on floating-rate mortgages and tracker mortgages who are already struggling.
Jeremy Willmont, head of restructuring and insolvency at Moore Stephens, said: “The interest rate cycle has turned. The unfortunate collateral damage of interest rate rises is more financial pain among mortgage holders and more personal insolvency.”
Data from the Insolvency Service shows a 10 percent rise in the number of individuals going bankrupt last year, increasing to 106,570 in the year to 30 September 2018 up from 96,940 in the previous 12 months.
“Increasing mortgage write-offs could suggest the economy is beginning to display signs of slowing down,” Willmont added. “Whatever type of Brexit we end up with, concerns have been raised about the potential impact on the economy. We could see more unemployment and more mortgage repossessions, and the Bank of England has said that a soft Brexit is likely to be followed by more interest rate rises.”