The data has revealed that there were 87,930 homeowner mortgages in arrears in Q3. At the same time, the number of Buy-To-Let (BTL) mortgage in arrears was 11,540, signalling a 29% rise.

The increases in arrears are driven by the combined impact of both cost-of-living pressures and higher interest rates. In particular, interest rate pressures are felt more acutely in the BTL sector, where landlords may not be able to raise rents to cover the increases in their payments.

For comparison, in Q3 2009 the number of homeowner and BTL mortgages in arrears was 207,200 - over twice the 99,480 seen last quarter. This reflects the benefits of lender stress tests carried out to ensure borrowers will be able to keep up with their mortgage payments, even if their interest rate rises above those in place when they first took out their mortgages.

Homeowner mortgages in arrears accounted for one per cent of all outstanding residential properties with a mortgage. The figure for BTL mortgages is 0.57%. UK Finance expects the combined number of homeowner and BTL mortgages in arrears to remain below one percent of the total number of mortgaged properties come the end of 2023.

UK Finance also highlighted that a total of 630 homeowner mortaged properties were taken into possession in the third quarter of 2023, nine per cent fewer than in the previous quarter. 450 BTL mortgaged properties were taken into possession during the same period, unchanged from Q2 2023.

Eric Leenders, managing director of personal finance, UK Finance, said: “Anyone worried about making their mortgage payments should contact their bank as soon as they can. All lenders have teams of experts ready to help anyone struggling with their mortgage payments with tailored support. The sooner you get in touch, the more support options your lender will be able to offer. What’s more, reaching out to your bank to find out what support is available won’t affect your credit score.”