In recent months, mortgage rates have been falling. This will help ease the payment shock for the 1.5 million homeowners and 230,000 BTL mortgage holders whose fixed-rate deals are due to end this year.

Lender stress tests have also helped ensure that borrowers are able to keep up with their mortgage payments, even when their interest rates rises above those in place when they first took out their mortgages.

Meanwhile, the number of possessions remains very low. Across BTL 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.

UK Finance managing director of personal finance Eric Leenders commented: “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. Importantly, help is available to anyone worried about their finances” He urged borrowers to reach out to their lenders as soon as possible to discuss the support options available.

“Lenders have teams of trained experts ready to help. Contacting your lender to find out what support is available won’t affect your credit score.”

Commenting on the latest data, LiveMore managing director of capital markets and finance Simon Webb said: “Consumer Duty is obviously working, as the number of homeowner-mortgaged properties taken into possession is down by a significant 14%. However, the report clearly demonstrates that consumers are still struggling to make ends meet, with nearly 100,000 homeowners unable to pay their mortgages”.

“When we see figures like this, we need to be particularly mindful of our older generations who are trying to pay unusually high SVRs when in fact they could potentially get a new mortgage.”