More than 2.6 million mortgage holidays have been approved to date as a result of the Covid-19 pandemic of which 140.000 remained in place at the end of October.
The figures were revealed in a UK Finance Mortgage Arrears and Possessions report, but do not take into account any new applications or extensions made since the second lockdown triggered an extension of the scheme for another six months.
The report showed that there were 74,850 home mortgages in arrears of 2.5% or more of the outstanding balance which is a 5% increase on the same time last year.
Within that figure the banking industry’s trade body said there were 24,860 mortgages ‘in significant arrears’ of 10% or more.
In addition there were 5,400 buy-to-let mortgages in arears of more than 2.5%, including 1,350 in arrears of 10% or more.
The figures were 19% up on 2019.
Repossessions were well down with 160 home owner and 230 buy-to-let properties being repossessed – 88% and 71% fewer than last year.
The government agreed moratorium on repossessions during the pandemic was the cause of the drop.
Mortgage broker Jonathan Harris commented: “The number of homeowners in arrears remains close to historically low levels, which is not surprising as many borrowers continue to take advantage of mortgage payment deferrals.
“However, it is important that borrowers appreciate that it is not a payment holiday and that interest will continue to rack up, so it should only be taken if really required.
“The uptick of BTL mortgages in arrears is from a low base, with the overall picture suggesting current levels remain lower than in previous years. The past few months have been difficult for landlords, however, with evictions put on hold, and many may be tempted to sell up once they have an opportunity to do so.”
A separate report by Pepper Money has revealed that more than a million people have missed some form of credit payment in the past six months without having a payment holiday in place.
Pepper Money spokesman Paul Adams said: “Covid-19 has been a disruptive influence on the finances of millions of people and official statistics have reflected the popularity of schemes like the mortgage payment holidays, which required customers to contact their lender to arrange a deferral of their payments.
“However, this research shows that many customers have missed credit payments as a result of Covid without a pre-agreed payment holiday in place and three quarters of this group are concerned that it will negatively impact their ability to secure a mortgage in the future.”