Adam Oldfield, chief revenue officer at Phoebus, says:

“Today’s figures from UK Finance highlight the trend that started at the end of last year and that set the tone for the first two months of 2023. “

“Nevertheless, we are starting to hear more positive news on the ground that the market is seeing some green shoots, which is what we have come to expect as we head into spring.”

“That being said, there are still worries regarding an increase in arrears in the coming months. There is an air of inevitability in this as interest rates continue to rise and borrowers come off very low fixed rate deals.”

“Lenders will need to be on the front foot to ensure that not only do they have the right systems in place but that they have the staff to ensure those exposed to this risk are given the help they need. We have been used to cheap money for such a long time, which was most certainly unsustainable, and for many, the current rates of interest are a shock to the system.”

“What everyone needs to understand now is that this is very likely now the ‘new normal’ and, as the Bank of England has already warned, rates will not be going down. Whether they’ve reached their height is the next question.”