According to the latest Q2 2025 data released by UK Finance, the number of residential mortgage arrears and possessions in the UK has seen an increase.
The report indicates a growing number of homeowners are falling behind on their repayments, reflecting the persistent pressure on household finances from high interest rates and the broader cost-of-living crisis.
While the figures show a concerning trend, UK Finance has emphasized that lenders are continuing to work proactively with customers who are experiencing financial difficulty.
This includes offering tailored support options such as payment holidays, term extensions, or switching to interest-only repayments.
The increase in arrears comes after a period of significant interest rate hikes by the Bank of England aimed at tackling inflation.
These rate increases have pushed up the cost of borrowing for both new and existing mortgage holders, particularly those on variable rates or coming to the end of a fixed-rate deal.
The data from UK Finance provides a crucial snapshot of the housing market's health and the financial stress on a segment of the population.
The situation highlights the delicate balance the Bank of England must strike between controlling inflation and preventing widespread financial distress for homeowners.
The focus now turns to whether the central bank's policies will ease sufficiently in the coming months to provide some relief to the mortgage market.
The report indicates a growing number of homeowners are falling behind on their repayments, reflecting the persistent pressure on household finances from high interest rates and the broader cost-of-living crisis.
While the figures show a concerning trend, UK Finance has emphasized that lenders are continuing to work proactively with customers who are experiencing financial difficulty.
This includes offering tailored support options such as payment holidays, term extensions, or switching to interest-only repayments.
The increase in arrears comes after a period of significant interest rate hikes by the Bank of England aimed at tackling inflation.
These rate increases have pushed up the cost of borrowing for both new and existing mortgage holders, particularly those on variable rates or coming to the end of a fixed-rate deal.
The data from UK Finance provides a crucial snapshot of the housing market's health and the financial stress on a segment of the population.
The situation highlights the delicate balance the Bank of England must strike between controlling inflation and preventing widespread financial distress for homeowners.
The focus now turns to whether the central bank's policies will ease sufficiently in the coming months to provide some relief to the mortgage market.
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