Proactive Investors - Some 9,000 buy-to-let mortgages slipped into arrears of at least 2.5% of their outstanding balances during the second quarter, as higher interest rates start to bite.
That’s 28% higher than the first quarter of the year, industry body UK Finance reported on Thursday, with homeowner mortgage figures providing little relief.
According to the group, as many as 81,900 homeowner mortgages faced arrears of 2.5% or more as of the last quarter, marking a 7% rise from the previous period.
The stark figures come after interest rates on mortgages have soared this year, as lenders react to anticipated changes to UK interest rates based on inflation.
“The harsh reality is the number of borrowers at risk of mortgage stress is at its highest level since 2008,” interactive investor analyst Myron Jobson commented.
“The situation could worsen if inflation doesn’t play ball and remains at a high level,” he added.
Though many big-name banks have moved to cut mortage rates since a flurry of hikes around June, many rates still remain around the 6% mark, with Virgin Money UK PLC (LSE:LON:VMUK) and NatWest Group PLC (LSE:LON:NWG) among the latest to announce reductions on Friday.
A UK Finance spokesperson moved to reassure that despite the rise in arrears, the number of people behind on payments remained less than 1%.