Kensington warns of increased arrears under no-deal Brexit

Kensington Mortgages has stated that mortgage arrears could jump by 30 per cent over the next three years in the event of a no-deal Brexit.

The lender reports that it used scenario-based modelling on a representative data set of 750,000 loans with an outstanding value of £97.2bn to come to this conclusion.

It also factored in no form of government intervention.

Specifically, the modelling reports that by spring 2022, 70,296 Britons would be more than three months behind on their mortgage repayments compared to 52,755 if the UK were to stay in the European Union, along with a rise in repossessions of 10 per cent.

It also details a drop of 17 per cent of new mortgage lending over the next five years in a no-deal event.

Kensington Mortgages chief executive Mark Arnold says: “Leaving the EU with no deal in place would, according to our model, see more homeowners struggle to make their monthly payments.

“Our expectation, however, would be that if we did end up exiting without a deal then the Bank of England would step in, as Mark Carney has hinted recently, and stabilise the market. Yet that would come at a cost to the taxpayer, with the public finances propping up homeowners at other people’s expense.

“If there was an intervention it would mostly benefit existing home owners by inadvertently artificially propping up prices, to the detriment of would-be first-time buyers.”

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