UK Mortgage Defaults Surge as Rates Rise

British lenders are witnessing a significant increase in the number of home mortgage defaults, the biggest increase since 2009, according to a new Bank of England survey.
The survey, known as the Credit Conditions Survey, showed its index of mortgage delinquencies rose to 30.9 in the second-quarter report from 14.0 in the first quarter, the highest level since mid-2009.
The Bank of England highlighted that both household mortgage losses and defaults increased in the second quarter and are expected to rise further in the third quarter.
Additionally, lenders expect demand for mortgages to fall sharply in the third quarter, the survey showed, in line with most economists’ expectations for a slowdown in activity in the UK housing market.
This slowdown is largely attributable to the gradual impact of successive rate hikes since late 2021 on mortgage costs.