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Publication - Research and analysis

Scottish Housing Market Review: Q4 2022

Published
6 January 2023
Directorate
Tackling Child Poverty and Social Justice Directorate
Topic
Housing
ISBN
9781805254256

Quarterly bulletin collating a range of statistics on the Scottish housing market, such as house prices and transactions, rental trends, cost and availability of finance, etc.

View supporting documents Supporting documents

7. Mortgage Arrears & Possessions

Arrears

There were 10,056 regulated mortgages that went into arrears across the UK in Q3 2022, an annual increase of 17.2% (1,476), although this is from very low levels in Q3 2021. Comparing to the pre-pandemic period in Q3 2019, the number of regulated mortgages entering arrears has fallen by 14.7% (1,732) As shown in Chart 7.1, following a peak of 39,556 in Q4 2008 during the financial crisis, there has been a declining trend in the number of regulated mortgages entering arrears, which has continued despite the impact of Covid-19. It should be noted that Covid-19 payment holidays were not classified as technical arrears, and thus are not reflected in these figures; however, even when these payment holidays came to an end in April 2021, this did not result in a substantial increase in arrears. (Source: FCA)

Chart 7.1 Number of Mortgage Loan Accounts Entering Arrears: UK (Quarterly)
Chart 7.1 outlines how the number of mortgage loans entering arrears across the UK has developed on a quarterly basis from Q3 2007 to Q3 2022.

Source: FCA

The share of lenders' outstanding regulated mortgage balances that were in arrears stood at 0.74% at the end of Q3 2022. This has remained broadly stable during the pandemic, with arrears at 0.86% at the end of Q1 2020. Chart 7.2 plots the share of lenders' outstanding balances that were in arrears by degree of severity. Arrears reported in the FCA MLAR data relate only to loans where the amount of actual arrears is 1.5% or more of the borrower's current loan balance.

Chart 7.2 Regulated Mortgage Balances in Arrears by Severity: UK, % (Quarterly)
Chart 7.2 provides a more detailed view into the percentage of regulated mortgage balances in arrears by severity in the UK on a quarterly basis. This is split into 5 categories, 1.5% - 2.5% in arrears, 2.5% - 5.0% in arrears, 5.0% - 7.5% in arrears, 7.5% - 10.0% in arrears, and 10.0% or more in arrears. This covers the period from Q3 2007 to Q3 2022.

Source: FCA

UK Finance data show that there were 5,760 buy-to-let mortgages in arrears of 2.5% or more of the outstanding balance across the UK in Q3 2022. This is down by an annual 2.0% (-120), and is also low relative to the period of the 2008 financial crisis. The number of buy-to-let mortgages in arrears of 2.5% or more as a percentage of the total number of buy-to-let mortgages was 0.28% as at Q3 2022, similar to the level in Q3 2021 (0.29%).

Possessions

Chart 7.3 shows that despite restrictions on possessions being lifted since 1 April 2021, there were only 1,054 new regulated mortgage possessions across the UK in Q3 2022. While this was an increase relative to Q2 2022 of 219 (+26.2%), and the level of possessions also increased over the year, possessions are still substantially lower (down 282, or 21.1%) relative to Q3 2019, prior to the pandemic.

Chart 7.3 New Possessions in quarter by type (Quarterly)
Chart 7.3 outlines how the number of new possessions has progressed over time, split into regulated, non-regulated and all possessions. This covers the period from Q3 2015 to Q3 2022.

Source: FCA

Contact

Email: bruce.teubes@gov.scot

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