The recent economic downturn has had a significant impact on the mortgage market, with both owner-occupiers and landlords experiencing an increase in mortgage arrears. This is a worrying trend that could have a long-term impact on the housing market, as well as the wider economy.
Owner-occupier mortgage arrears have risen significantly since the start of the pandemic, with the number of households in arrears increasing by over 50% in the first quarter of 2020. This is largely due to the fact that many people have lost their jobs or seen their incomes reduced, making it difficult to keep up with their mortgage payments. In addition, the government’s furlough scheme has been extended until April 2021, meaning that many people are still uncertain about their financial future.
The situation is even more concerning for landlords, with the number of buy-to-let mortgages in arrears increasing by over 70% in the first quarter of 2020. This is largely due to the fact that many tenants have been unable to pay their rent due to job losses or reduced incomes. As a result, landlords have been unable to keep up with their mortgage payments, leading to an increase in arrears.
The rise in mortgage arrears is a worrying trend that could have a long-term impact on the housing market and wider economy. It is important that both owner-occupiers and landlords are supported during this difficult time, so that they can keep up with their mortgage payments and avoid falling into arrears. The government has already taken steps to help those affected by the pandemic, such as introducing a mortgage payment holiday, but more needs to be done to ensure that people are not left struggling with their mortgage payments.
In conclusion, the recent increase in mortgage arrears among both owner-occupiers and landlords is a worrying trend that could have a long-term impact on the housing market and wider economy. It is important that those affected by the pandemic are supported so that they can keep up with their mortgage payments and avoid falling into arrears.