UK mortgage arrears increased to their highest rate in six years in the three months to September, according to data from the Bank of England, signalling a reversal of a longer-term decline and demonstrating the impact of higher interest rates on household finances.
The proportion of the total loan balances with arrears, relative to all outstanding mortgage balances, rose to 1.14% in the third quarter from 1.02% in the previous three months and the highest since the second quarter of 2017, figures showed.
New arrears cases decreased by 0.3 percentage points from the previous quarter to 15.8% of the total outstanding balances with arrears but remained 5.1 percentage points higher than a year earlier.
The value of outstanding mortgage balances with arrears increased by 11.4% from the previous quarter to £18.8 billion and was 44.0% higher than a year earlier.
However, arrears remain well below their peak rates of 3.64% in the first quarter of 2009.