Mark Pilling, Spicerhaart Corporate Sales managing director, says “As much as arrears remain historically low, there is the danger that anyone on a tracker or SVR mortgage would be looking at affordability now that interest rates have increased. The governor of the Bank of England has already suggested that this will not be the last rate rise this year, which is likely to put more pressure on some people.
“UK Finance recently announced that lenders have signed up to agree common standards, which will help existing borrowers on reversion rates who, because of stricter affordability criteria, are ineligible to move to an alternative product. However, there are currently over 150,000 mortgage prisoners, but these proposals will only help 10,000 people initially, which is a drop in the ocean. For the other 140,000 there is a real threat that, as wages stagnate and they remain on high interest rates, they will fall into arrears. Although it is good that some progress has been made, it is important for lenders, and mortgage owners, to now be looking at all the cases on their books and finding ways to help their clients out of this situation.”