Within the total, there were 22,050 homeowner mortgages with more significant arrears (representing 10% or more of the outstanding balance). This was 6% fewer than in the same quarter of the previous year.
On the buy-to-let front there were 4,420 mortgages in arrears of 2.5% or more of the outstanding balance in the first quarter of 2020, 6% fewer than in the same quarter of the previous year.
In total 1,070 homeowner mortgaged properties were taken into possession in the first quarter of 2020, 23% fewer than in the same quarter of the previous year. 640 buy-to-let mortgaged properties were taken into possession.
Dave Miller, client account manager at Spicerhaart Corporate Sales, said: “The modest rise in arrears from Q4, an increase of just over 2%, can be attributed to the early impact of Covid-19, as homeowners’ income began to be affected by a fall-off in economic activity.
“As UK Finance themselves point out, mortgage payment holidays were introduced shortly after this, and this should enable most borrowers to avoid getting into serious difficulties.
“The government’s furlough scheme will also be of benefit in this respect.
“There remains a serious issue for the more than 22,000 homeowners with arrears of 10% of their mortgage balance or more – a number that had been gradually falling before Covid-19 struck but still highly significant for the individuals and families involved.
“Although they will benefit in the short run from the cessation of possessions activity, the longer it goes on, the worse their position becomes.
“Most of those borrowers are unlikely to be in a better position to address those arrears after the payment holiday is ended, and both lenders and the government need to think through what the best approach is to helping people in that situation.”
