Some 700 homeowner mortgaged properties and 390 buy-to-let mortgaged properties were taken into possession during the third quarter of 2022, according to data released by UK Finance.

The figures represent a 15% and 11% rise on Q2 respectively.

The data released also showed there were 74,440 homeowner mortgages in arrears of 2.5% or more of the outstanding balance in the third quarter of 2022 – a 1% drop on the second quarter. Within that total, there were 28,910 homeowner mortgages with arrears representing 10% or more of the outstanding balance – unchanged from the previous quarter.

According to the Q3 figures there were 5,760 buy-to-let mortgages in arrears of 2.5% or more of the outstanding balance, representing a 2% rise on Q2. Among those, 1,780 had more significant arrears of 10% or more of the outstanding balance, representing a 1% drop on the previous quarter.

Commenting on the figures, Richard Pike, chief sales and marketing officer of Phoebus Software, said that although they showed very little change from the previous quarter, it is the underlying number with more significant arrears that lenders should be watching.

“Forbearance during, and since, Covid has meant that lenders have had to change their processes and as such allow more significant arrears to build,” said Pike. “With inflation and interest rates rising it is only right to expect that the number of borrowers in arrears is going to increase.

“Unfortunately, during the period of forbearance lenders didn’t have the need for large teams to deal with arrears. As things change it will be vital for lenders to ready themselves and get the infrastructure in place to deal with an inevitable rise in arrears.

“It will also be incumbent on lenders to manage borrowers and ensure that arrears don’t build up to an unhealthy level, otherwise repossessions too may rise,” Pike added.