UK mortgage write-offs hit record high
It’s almost certainly too early to get worried about a housing bust in the UK. It may well happen, the way things are going with the property market at the moment – but not for some years. All the same, here’s an interesting statistic released by the Bank of England this morning: in the final quarter of last year UK mortgage lenders wrote off more mortgage debt than in any quarter in the past two decades.
In Q4 2013 lenders wrote off £272m of debt secured on dwellings. This is a touch higher than the £270m hit in 2009 (though of course it will be a touch lower as a % of GDP). It’s only one piece of data – and from a volatile and unpredictable series at that. But I’d expect, given the increasing amount of debt being handed out by lenders, often at high income multiples, that write-offs may well mount up in the coming years, particularly when interest rates rise and households start to struggle with loan payments.
You can find the full data here.