Lenders have reported a rise in mortgage defaults over the past few months, with another increase expected over the coming quarter.
More UK householders were seen defaulting on secured loans over the three months to August relative to the previous quarter, the Bank of England reported on Thursday.
This marked the seventh consecutive quarter where lenders reported an increase in default rates on secured loans, while expectations were for another jump in those falling behind on payments over the coming three months.
Default rates on unsecured loans fell in the meantime, according to the Bank of England, driven by fewer people missing credit card payments.
KPMG financial services head Karim Haji noted the figures showed households were “still struggling in the current environment”.
“Unsecured lending demand, while stable, remained elevated compared to the first quarter of the year,” Haji continued.
“A fall in default rates for unsecured lending is an encouraging sign and reflects the cautious approach to credit being taken by households.”
A rise in inflation over the coming months, coupled with still-high interest rates could mean “spending power may not be unlocked any time soon” though, Haji added.
“Even then, we are seeing a shift in consumer behaviour over the medium to longer term which is focused on saving not spending.”