Banks have recorded an eighth successive quarterly rise in the number of households defaulting on their mortgages.
Default rates on secured loans “increased slightly” over the final quarter of last year, a survey released by the Bank of England on Thursday found.
Losses for banks related to defaults also increased as a result and were expected to rise further in the first quarter of this year.
Rising numbers of mortgage defaults have coincided with hikes in interest rates to their highest since 2008 in recent years.
The fourth quarter’s increase meant mortgage defaults had risen consistently for two years straight and for the most prolonged period since the Bank of England’s survey began in 2007.
“This points to the financial strain on households as many are hit by higher mortgage rates in an environment which is still challenged by high cost of living and uncertain future interest rates,” KPMG UK and global financial services head Karim Haji said.
“Against a backdrop of weak UK growth and continued inflationary pressures, we may see defaults continue to rise in the months ahead.
“Recent shifts in expectations on when and by how much interest rates are likely to fall mean households might expect more financial pain for longer.”