Richard Pike, Phoebus Software Chief Sales and Marketing Officer, says “Although the headline figure from UK Finance today shows a fall in arrears in Q2, the underlying data is pointing to a shift as the pressures from rising interest rates and inflation take hold. The rise in homeowner possessions, of 5% on Q1, is perhaps an early indicator of things to come.
“The prediction that household energy bills are likely to average £350 per month by January next year is something that, added to the rising cost of mortgages, will put immense pressure on many households. Now is the time for borrowers and lenders to be talking to each other and looking at ways to try to manage potential arrears or defaults. It’s not a terrible picture at the moment, but unfortunately there will be some that find themselves in a difficult position over the next six to twelve months, unless things change dramatically.
“That said, lenders should now be investing in ensuring their standard arrears procedures managed on servicing platforms are as automated as possible so that cases, that need to be managed by exception, can be given the time and effort required to ensure the right borrower outcomes”.