UK Banks Report Fastest Growth in Mortgage Losses Since Financial Crisis

Rising interest rates and economic pressures lead to sharp increase in defaults on unsecured debt, with further losses expected in coming months.

UK banks and building societies are reporting the fastest growth in mortgage losses since the financial crisis, with a significant increase in households failing to keep up with repayments.
Defaults on unsecured debt, including credit cards and loans, are also expected to rise sharply, marking the highest increase since 2009.
The rise in defaults and losses is attributed to rapidly rising interest rates, with the Bank of England raising rates from 0.1% in December 2021 to 5.25% currently.
Despite a recent drop in mortgage rates, banks are bracing for losses to continue mounting in the coming months.
Although demand for new mortgages and credit card lending fell in the final quarter of 2023, both are expected to increase in early 2024.