Mortgage Defaults Rise to Highest Level since 2009, UK Lenders Anticipate Sharp Drop in Demand
A new report from the Bank of England has revealed that mortgage defaults have risen to the highest level since 2009, with lenders expecting defaults to rise further in the coming months.
The bank's Credit Conditions Survey found that mortgage defaults in the second quarter of 2023 increased to 30.9 on its index, up from 14 in the first quarter.
This is the highest score on the index since mid-2009 when it peaked at 60.
The report, carried out between 30 May and 16 June, also found that lenders expect demand for mortgages to fall sharply in the third quarter, while the availability of mortgages and non-mortgage credit to households is also expected to drop.
However, lenders anticipate that the availability of credit to businesses will remain unchanged.
The recent rise in mortgage defaults is partly due to the increase in mortgage rates, which have risen sharply in recent months as the Bank of England tries to bring down inflation.
The average two-year, fixed-rate mortgage for homeowners across all deposit sizes is now 6.75%, while the average five-year fix on offer has a rate of 6.27%, according to figures from Moneyfactscompare.
As a result, many homeowners are facing higher monthly mortgage payments, with some expecting to see their payments jump by £500 or more by the end of 2026.
The rising cost of mortgages is putting a strain on household budgets, which are already under pressure from other rising costs such as food prices.
High food prices are pinching households across Europe, where food inflation is outpacing other major economies like the U.S., Japan, and Canada.
Some governments have responded with formal price controls or loose agreements with supermarkets to keep costs down.
Overall, the survey indicates that the UK's mortgage market is facing challenging times, with rising defaults and tightening credit availability.
As a result, homeowners and lenders alike are facing a period of uncertainty and potential financial strain.
British Prime Minister Boris Johnson has pledged to invest billions of dollars in infrastructure projects to boost economic growth and create jobs.
The UK government has announced a £100 billion ($131 billion) injection of funds into the country's infrastructure over the next decade.
The funding will be used to finance projects such as high-speed rail links, new roads, and improvements to digital and energy infrastructure.
The government's infrastructure agenda is aimed at boosting economic growth and creating jobs.
The projects will provide a much-needed stimulus to the UK economy, which has been struggling since the country's exit from the European Union in 2016.
Transport Secretary, Grant Shapps, said the investment would help create 600,000 jobs and increase the country's GDP by up to 1 per cent.
"We are going to be spending £100 billion on infrastructure over the next 10 years," Shapps said.
"This will be the biggest increase in investment in our national infrastructure for 40 years." The government's infrastructure plan is part of its wider strategy to rebuild the country's economy after years of underinvestment.
The projects will not only create jobs and boost economic growth but will also improve the quality of life for people across the UK.
British Chambers of Commerce (BCC) Director-General, Adam Marshall, said the investment would be a "game-changer" for the UK economy.
"The government's commitment to invest in infrastructure is a clear signal that they are serious about boosting the economy and creating jobs," Marshall said.
However, critics have raised concerns about the funding allocation, with some arguing that the investment should be more evenly distributed across the country.
The government has pledged to address these concerns as part of its wider infrastructure strategy.
The UK's infrastructure plan is a significant investment in the country's future, and it is expected to have a profound impact on the economy and people's lives for years to come.
The government's commitment to investing in infrastructure is a positive step towards rebuilding the country's economy and creating a better future for all.
This is the highest score on the index since mid-2009 when it peaked at 60.
The report, carried out between 30 May and 16 June, also found that lenders expect demand for mortgages to fall sharply in the third quarter, while the availability of mortgages and non-mortgage credit to households is also expected to drop.
However, lenders anticipate that the availability of credit to businesses will remain unchanged.
The recent rise in mortgage defaults is partly due to the increase in mortgage rates, which have risen sharply in recent months as the Bank of England tries to bring down inflation.
The average two-year, fixed-rate mortgage for homeowners across all deposit sizes is now 6.75%, while the average five-year fix on offer has a rate of 6.27%, according to figures from Moneyfactscompare.
As a result, many homeowners are facing higher monthly mortgage payments, with some expecting to see their payments jump by £500 or more by the end of 2026.
The rising cost of mortgages is putting a strain on household budgets, which are already under pressure from other rising costs such as food prices.
High food prices are pinching households across Europe, where food inflation is outpacing other major economies like the U.S., Japan, and Canada.
Some governments have responded with formal price controls or loose agreements with supermarkets to keep costs down.
Overall, the survey indicates that the UK's mortgage market is facing challenging times, with rising defaults and tightening credit availability.
As a result, homeowners and lenders alike are facing a period of uncertainty and potential financial strain.
British Prime Minister Boris Johnson has pledged to invest billions of dollars in infrastructure projects to boost economic growth and create jobs.
The UK government has announced a £100 billion ($131 billion) injection of funds into the country's infrastructure over the next decade.
The funding will be used to finance projects such as high-speed rail links, new roads, and improvements to digital and energy infrastructure.
The government's infrastructure agenda is aimed at boosting economic growth and creating jobs.
The projects will provide a much-needed stimulus to the UK economy, which has been struggling since the country's exit from the European Union in 2016.
Transport Secretary, Grant Shapps, said the investment would help create 600,000 jobs and increase the country's GDP by up to 1 per cent.
"We are going to be spending £100 billion on infrastructure over the next 10 years," Shapps said.
"This will be the biggest increase in investment in our national infrastructure for 40 years." The government's infrastructure plan is part of its wider strategy to rebuild the country's economy after years of underinvestment.
The projects will not only create jobs and boost economic growth but will also improve the quality of life for people across the UK.
British Chambers of Commerce (BCC) Director-General, Adam Marshall, said the investment would be a "game-changer" for the UK economy.
"The government's commitment to invest in infrastructure is a clear signal that they are serious about boosting the economy and creating jobs," Marshall said.
However, critics have raised concerns about the funding allocation, with some arguing that the investment should be more evenly distributed across the country.
The government has pledged to address these concerns as part of its wider infrastructure strategy.
The UK's infrastructure plan is a significant investment in the country's future, and it is expected to have a profound impact on the economy and people's lives for years to come.
The government's commitment to investing in infrastructure is a positive step towards rebuilding the country's economy and creating a better future for all.
