Propertymark has urged the Bank of England to cut interest rates “as soon as practically possible” after the trade body noted a rise in mortgage arrears.
Data from banking trade body UK Finance shows that approximately 93,680 homeowner mortgages were in arrears of 2.5 per cent or more of the outstanding balance in the fourth quarter of 2023.
This represents a 7% increase in contrast to the previous quarter and 25% more annually.
Additionally, 30,750 mortgages were in the most alarming arrears band. This was a 4% jump in contrast to the previous quarter and 8% more compared with the same period a year before.
Nathan Emerson, chief executive of Propertymark, said: “If the Bank of England meets its own inflation target of two per cent earlier than they planned, then they should look to reduce interest rates as soon as they can.
“Mortgage affordability is a critical issue at the moment, and Propertymark’s own Housing Insight Report found that many agents are selling below the initial asking price for homes due to mortgages becoming increasingly expensive as a result of higher interest rates and inflation.
“Also, many landlords on variable or tracked rate mortgages are now struggling with rising mortgage costs and increased taxes against a backdrop of increasing legislation, ultimately making renting more expensive and forcing some landlords out of the sector completely.”