UK Finance today release its latest Household Finance Review for Q3 2024, which explores trends in household spending, saving, and borrowing.
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Mortgage lending grew steadily for the second successive quarter, rising by 15 per cent year-on-year, despite the continuing affordability challenges facing first-time buyers.
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Household savings continued to grow in Q3, driven by an 8.5 per cent rise in deposits in notice accounts since the end of 2023.
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Arrears numbers fell by three per cent in Q3, more than reversing the very modest increases seen in the first half of the year. For those households who are worried about their mortgage payments, help is available from their lender.
Mortgage lending
After returning to annual growth in the second quarter, mortgage lending rose again in the third quarter of this year (Q3), with the number of completions increasing by 15 per cent year-on-year.
Mortgage activity throughout 2024 has been very sensitive to changes in product pricing. In the third quarter, as lenders were able to reduce prices further, we saw application volumes increase. This points to further lending growth in the final quarter of 2024.
While affordability challenges have eased over the course of the year, they continued to impact both homebuyers and those looking to remortgage.
Internal product transfers, where an affordability assessment is not needed, remain popular and accounted for 83 per cent of all refinancing in Q3.
For first time buyers, despite the downward movement in rates this year, other factors including rising house prices are pushing affordability metrics back towards levels seen late last year, as show in the chart below:
Proportion of new FTB loans where monthly payments exceed 30 per cent of gross income
Mortgage arrears, possessions, and the help available
As previously reported, the number of mortgages in arrears fell by three per cent to 106,630. Early arrears cases also fell again, suggesting we’ll see a further fall in total arrears numbers in Q4.
There were 1,700 mortgage repossessions in Q3, unchanged from Q2 and still substantially below pre-pandemic levels. The courts continue to work through their backlog of historic long-term cases from before the pandemic.
Responsible lending policies mean that relatively few households will fall into arrears, and possession is only ever a last resort. For anyone concerned about paying their mortgage, please contact your lender as soon as possible to discuss the help available.
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