There has been an increase in arrears for both homeowner and buy-to-let mortgages in the final quarter of 2023, fuelled primarily by greater cost-of-living pressures and higher interest rates, according to the latest data from UK Finance.

Homeowner mortgages in arrears increased 7% to 93,680 compared to the previous quarter, while buy-to-let in arrears rose 18% to 13,570 during the same period.

Some 540 homeowner mortgaged properties were taken into possession in Q4 2023, down 14% on the previous quarter. Meanwhile, 500 BTL mortgaged properties were taken into possession in Q4, 11 per cent greater than the previous quarter.

The data also shows that just over 1,000 possessions were recorded, although it is wort noting that this is low compared with pre-Covid levels.

Across buy-to-let and homeowner mortgaged properties, a total of 1,040 were repossessed in Q4 2023. This compares with nearly 2,000 in Q4 2019 before the pandemic.

Eric Leenders, managing director of personal finance, UK Finance, said: “The number of mortgage holders in arrears, whilst still low, is continuing to rise as the cost-of-living and high interest rates take their toll on households.”