In response to a persistent rise in mortgage arrears, Propertymark has called upon the Bank of England to consider a reduction in the base interest rate as soon as possible.

According to recent data from UK Finance, approximately 93,680 homeowner mortgages find themselves in arrears exceeding 2.5% of the outstanding balance during the fourth quarter of 2023. This marks a 7% increase compared to the preceding quarter and a substantial 25% surge from the same period in 2022.

Further analysis reveals that 30,750 mortgages are now classified in the highest arrears band, showcasing a 4% rise from the previous quarter and an 8% increase from the corresponding period a year ago.

Nathan Emerson, CEO at Propertymark, conveyed a pragmatic stance, stating, “If the Bank of England achieves its inflation target of 2% earlier than planned, there should be a swift consideration for a reduction in interest rates.

"Mortgage affordability is a pressing concern, as highlighted in Propertymark’s Housing Insight Report, revealing instances where agents are selling below the initial asking price due to the escalating costs resulting from higher interest rates and inflation.

"Moreover, landlords with variable or tracked rate mortgages are grappling with mounting mortgage expenses and increased taxes amidst a backdrop of expanding legislation, making renting a more expensive proposition and prompting some landlords to exit the sector entirely.”