Figures from the Bank of England show that mortgage balances with arrears grew for the first time since Q2 2016, standing at £14.5bn in Q3 of this year, up from the £14.3bn recorded in the previous quarter.
The bank adds, however, that the proportion of total loan balances in this state is still at 1 per cent, the lowest range since records began.
The data also shows that the outstanding value of all residential mortgage loans grew to £1.4tn in the third quarter, a yearly increase of 3.2 per cent.
Meanwhile, the value of gross mortgage advances increased from £70.8bn to £73.5bn – an annual rise of 3.7 per cent, and the highest level recorded since the final quarter of 2007.
In terms of the value of new lending commitments, overall this was 4.7 per cent higher annually, with the proportion going to first-time buyers flat at 21 per cent; the share going to remortgaging up 2 per cent annually to make up 30 per cent of new lending, and 12 per cent going for buy-to-let use down from 12.8 last year and the lowest level since Q4 2012.
Spicerhaart corporate sales managing director comments: “With the recent rate rises, I had predicted we would start to see arrears rise again, and I fear this could be the start of a more permanent shift.
“There are growing concerns that many people are now relying on credit cards for everyday purchases, and while many in this situation are able to keep their heads above water now, if there is another rate rise, payment shock coming off a fixed rate deal or rise in the cost of living, many people may struggle to make their monthly mortgage payments or rent – which in turn will impact landlords and where appropriate their ability to make mortgage payments.”
Responsible Lending managing director Keith Haggart adds: “It’s less a case of what’s changed, more a case of what hasn’t. Britons have shrugged off political uncertainty and are borrowing more than at any time since before the financial crisis.
“In fact the growth of new mortgage commitments for the coming months is still vastly outstripping house price growth nationally.
“Favourable borrowing conditions, tax breaks and a desire to buy for the long-term, has blunted the sword of any concerns surrounding Brexit and buyers are still on the march.
“The only thing noticeable by its absence is a jump in the proportion of borrowing by FTBs, which doesn’t appear to have shifted since Stamp Duty tax breaks were introduced. This will only fuel fears the tax break ends up in the pockets of sellers and developers. However, FTBs are continuing to benefit from the exit from the market of many landlords, which sent BTL borrowing to a five-year low.”