"With the recent rate rises, I had predicted we would start to see arrears rise again, and I fear this could be the start of a more permanent shift."
Mortgage arrears increased to £14.5 billion in Q3, compared to £14.3 billion in Q2, however the proportion of total loan balances in arrears remained at 1%, the lowest since the series began.
Elsewhere, the data showed positive trends for first-time buyers, who maintained a steady market share of 21%.
The share of new lending in the highest loan-to-income brackets continued its upward trend in Q3 and is at its highest since the series began in 2007 Q1, reaching 47%.
The share of loans with an LTV ratio exceeding 90% also increased, to 4.3%.
The share of new lending for buy-to-let purposes declined to 12% in Q3, its lowest since Q4 2012.
Remortgaging, as a proportion of new lending, is 2 percentage points higher than a year ago but decreased marginally on the quarter to 30%.
Mark Pilling, managing director of Spicerhaart Corporate Sales, commented: “With the recent rate rises, I had predicted we would start to see arrears rise again, and I fear this could be the start of a more permanent shift. Consumers racked up a record £17.1 billion of credit card debt in October, 11.6% higher than a year earlier, and October is not usually a month associated with big spending.
"Since those stats, we have had a record spending day on Black Friday, most of which was online so likely to be spent on cards, and we have Christmas coming up – traditionally a time when many families overstretch themselves in terms of spending.
“There are growing concerns that many people are now relying on credit cards for everyday purchases, and while many in this situation are able to keep their heads above water now, if there is another rate rise, payment shock coming off a fixed rate deal or rise in the cost of living, many people may struggle to make their monthly mortgage payments or rent – which in turn will impact landlords and where appropriate their ability to make mortgage payments.
“Repossession should always be the last resort and lenders should always look to find another option if it is available. We can help lenders find solutions that best suit them and their customers, so it is important that lenders start looking at all their borrowers and identify those who are already having difficulties managing their mortgage or are likely to experience future difficulties.”
