Lenders agreed to support homeowners.

Some of the UK’s largest banks have agreed on measures with the government to help struggling borrowers as they brace for a surge in late mortgage payments. The so-called forbearance measures used during the financial crisis are an attempt by banks including HSBC, Barclays, Lloyds and NatWest to avoid repossessions and more pain for borrowers on top of soaring inflation and high energy bills. The move follows a meeting this month between Jeremy Hunt and the UK’s largest banks when the chancellor made clear that lenders would need to help homeowners repay debt. It highlights the difficult time ahead for borrowers, with about 1.8mn people in Britain needing to remortgage next year as their fixed-rate deal ends, leaving them with the prospect of much higher costs.

UK lenders are already preparing to set aside further provisions in their full-year results in February to cover the expected increase in loan losses as more borrowers struggle with their mortgage repayments. He said the situation was not comparable to the property market collapse in the financial crisis when the number of UK home loans in arrears reached nearly 400,000. The average five-year fixed-rate mortgage is above 5.6 per cent from 2.66 per cent in January, according to data provider Moneyfacts. However, brokers have warned that the higher rates and pressure from inflation will lead more borrowers to stay caught up on repayments in 2023.

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Cloud Bookkeeping

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