Details from Friday 23rd June’s meeting between the chancellor & the bankers discussed the latest market indicators which showed that mortgage arrears & defaults remain below the pre-pandemic levels. This places the market in a significantly stronger position than before.
- Less than 1% of total residential mortgage borrowers were in arrears in the first quarter of 2023 – Significantly lower than the 3.32% rate in 2009.
- The proportion of disposable income spent on mortgage payments is currently 5.4%, as against about 10% in the 1990s & prior to the 2008 financial crisis.
- The average homeowner re-mortgaging over the last 12 months had around a 50% loan-to-value ratio, with considerable equity in their homes.
- Lenders have less than 10% ‘owner-occupier mortgages’ on their books with loan-to-value rates greater than 75%, compared to around 25% before the 2008 financial crisis.
In summary the market is not as bleak as perhaps the media is suggesting.