The lenders’ trade body – UK Finance – says that despite the wider economic problems there has been no impact on headline mortgage arrears in the third quarter of 2022. 

Overall arrears continued to fall in Q3; however, it warns that the burdens from falling incomes and higher mortgages could mean an uptick in arrears next quarter and into next year. 

Possession numbers remain substantially lower than previous normal levels and UK Finance says that possession is always a last resort, and those going through the courts at the moment are historic cases relating to long-term arrears built up over a period of years.

Eric Leenders, managing director of personal finance at UK Finance, says: “The levels of home buying and selling were in line with pre-pandemic trends in Q3, but we expect activity to cool next year. Cost of living pressures and changing employment patterns are likely to have an impact on demand and affordability going forward.

“At the same time, 1.8m fixed rate deals are due to end in 2023, so refinancing levels will be robust. We would encourage customers to speak to a mortgage advisor and shop around for the best deal for their circumstances.

“Lenders are here to help. Anyone who is worried about their mortgage, loan or credit card payments, should speak to their lender as soon as possible to discuss the options available to help.”

And Krishnapriya Banerjee, a managing director in Accenture’s UK banking practice, adds: “Waning consumer confidence shows that people are bracing for tougher times ahead and seeking to stretch affordability. Banks will need to address the twin challenge of supporting households through this uncertain economic period whilst ensuring they have sufficient operational resilience to handle the weight of growing customer demands.”