Propertymark wants the Bank of England to cut interest rates following data showing soaring mortgage arrears and repossessions.

Lenders trade body UK Finance says buy to let mortgage arrears of 2.5 per cent or more of the outstanding balance increased to 13,570 in the last three months of 2023 – the latest data. Some 500 buy to let mortgaged properties were taken into possession in Q4, which is 11 per cent greater than the previous quarter.

UK Finance also warns that there are 230,000 BTL mortgage holders whose fixed rate deals are due to end this year.

In addition some 93,680 homeowner mortgages were in arrears of 2.5 per cent or more of the outstanding balance in the fourth quarter of 2023 – a seven per cent increase on the previous quarter and 25 per cent more than the fourth quarter of 2022. 

And 30,750 mortgages were in the most alarming arrears band. This was a four per cent jump in contrast to the previous quarter and eight per cent more compared with the same period a year before.  

Propertymark chief executive Nathan Emerson now says: “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.”

UK Finance insists that lender stress tests have helped ensure that borrowers are able to keep up with their mortgage payments, even when their interest rate rises above those in place when they first took out their loans. However it adds: “We know that other factors outside the control of lenders can also impact customers’ ability to manage their mortgage payments, so we would encourage anyone worried about their finances to reach out to their mortgage lender at the earliest opportunity to discuss the options available for their circumstances.”

It also says the total number of possessions remains very low by long term standards.