10 August 2023 , 20:05
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One in five wannabe home owners have delayed their plans as interest rates continue to soar.
Among those already with a home loan, 27% have opted to make lump sum repayments to reduce their debt ahead of having to remortgage. And 13% have downsized to reduce their monthly bills, says a survey by Butterfield Mortgages. New data out yesterday showed that 81,900 mortgages were in arrears of 2.5% or more of the outstanding balance in the second quarter of 2023.
That was 7% higher than the previous quarter. Trade body UK Finance said home repossessions were expected to rise amid the cost of living crisis. But there could be hope for borrowers with signs of a mini-price war between lenders. Halifax, First Direct and NatWest have joined other lenders in cutting mortgage rates.
Home repossessions are expected to rise amid cost of living crisis (Getty Images/iStockphoto)Halifax said it was reducing five-year fixed-rate mortgages by up to 0.71 percentage points, and two-year fixed-rate loans will fall by as much as 0.27 percentage points. Some 28,690 homeowners had arrears in the most severe band of more than 10% of the mortgage balance, which was up by 2% compared with the previous quarter.
There were 8,980 buy-to-let mortgages in arrears of 2.5% or more of the outstanding balance in the second quarter of 2023, 28% higher than in the previous quarter.
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