UK Finance has confirmed that there are now 162,000 mortgage deferrals in place, down significantly from the 1.8m in place in June.

It confirmed that lenders have now provided a total of 2.5 million mortgage payment deferrals since the start of the pandemic. 

UK Finance released figures as the banking industry reiterated its commitment to offer support for customers struggling with mortgage payments in light of the worsening coronavirus pandemic and subsequent lockdowns in many parts of the country. 

It also said that a total of 4.4m deferrals had been granted across mortgage, credit card and loan accounts. UK Finance said initial analysis suggests around three quarters of customers whose deferral period had ended had now returned to making regular repayments.

In line with guidance from the Financial Conduct Authority lenders said they will continue offer a range of tailored options to support borrowers who face financial difficulties. 

The FCA’s latest customer research also shows that almost a third of adults (31 per cent) have seen a decrease in income, with households seeing income fall by a quarter, on average.

This news comes as the government increases its support package for both individuals and businesses affected by the pandemic. 

UK Finance says lenders are offering a range of options to support those who are having difficulty paying a mortgage. 

These include:

• extending the length of the mortgage term.
• changing the type of mortgage (e.g. a temporary change to an interest-only mortgage).
• deferring payment of the interest or the sums due
• capitalising the interest accrued

Support will be available both for those who have previously taken a payment deferral and those who are newly in financial difficulty.

UK Finance managing director of personal finance Eric Leenders says: “The banking and finance industry is providing unprecedented levels of support to help customers through the Covid-19 crisis. 

“We understand that many people’s finances will continue to be impacted by this pandemic and want to reassure them that ongoing help is available, tailored to their individual circumstances.

“Anyone still experiencing financial difficulty should get in touch as early as possible to discuss the options available, starting by checking their lender’s website which will be updated with the latest information.”