It's no secret that the soaring cost of living and the increase in interest rates being deployed to bring prices under control are putting immense pressure on both first-time home buyers and existing mortgage holders.
According to recent figures from UK Finance, the trade body representing more than 300 organisations from the banking and finance industry, there has been an unsurprising but nonetheless concerning rise in the number of households in mortgage arrears. Its figures show there were 81,900 homeowner mortgages in arrears of 2.5% or more of the outstanding balance in the second quarter of this year, a 7% increase compared to the previous quarter.
Among that total, 30,940 fell within the lightest arrears band ranging from 2.5% to 5% of the borrower's outstanding mortgage balance, up 12% on the previous quarter and 23% year-on-year. Some 14,070 homeowners had arrears of between 5% and 7.5% of the outstanding balance, a further 8,200 were between 7.5% and 10%, and 28,690 were at more than 10%.
READ MORE: Pressure on ministers to help families with mortgage costs
Meanwhile, a generation of first-time buyers who until recently have only ever operated in a world of rock-bottom interest rates are finding it increasingly difficult to secure a foothold on the property ladder. This is reflected in the roughly 5,500 new mortgages advanced to first-time buyers in Scotland in the first quarter of this year, down some 20% on the same period in 2022.
The knock-on effects of higher mortgage costs are being felt throughout the rental sector, while rural housing difficulties have also been exacerbated. The Herald's business team will explore all of this in the coming days with the start of tomorrow's Housing Crunch series.
It's a difficult situation, but not insurmountable. We have spoken to experts about ways to ease pressure in the short-term, and crucially we have also heard about some of the structural changes needed to create a stable market in the long-term.
Check in with The Herald tomorrow to see what we've discovered.
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