“The biggest worry is households on shorter-term fixed rates due to expire in the next 12 months, rolling off sub 1% mortgages that are set to jump up to somewhere around 6%.”

Lewis Shaw, founder and mortgage expert at Shaw Financial Services: “I’ve been told by an insider at one of the UK’s leading high street lenders that they’re gearing up for a significant rise in repossessions, arrears and defaults over the next 24 months. The fact this particular lender is making these moves already speaks volumes. The biggest worry is households on shorter-term fixed rates due to expire in the next 12 months, rolling off sub 1% mortgages that are set to jump up to somewhere around 6%. For an average-sized mortgage loan, this could be an increase of up to £600 per month. This could well be the straw that breaks the camel’s back.”

Jonathan Burridge, founding adviser at We Are Money: “Mortgage lenders have been beefing up their customer support teams this year in anticipation of an increase in borrower financial difficulties. The regulators have already made their expectations clear that lenders need to be supportive of borrowers. Mortgage payment shock will hit many, but it is anticipated that whilst the number of loans in arrears may increase, the percentage of loans that face litigation will not rise as an overall percentage. It is in nobody’s interests to see forced sales and repossessions.”

Graham Cox, director at Self Employed Mortgage Hub: “Forced sales and much higher numbers of repossessions seem almost inevitable, unfortunately. The scenario we’re seeing play out, a sudden and unexpected jump from 1-2% mortgage rates to 6%+ is simply going to make mortgage payments impossible for many. It would have been much better if rates were raised gently over 2 or 3 years. Yes rates were much higher in the early 90s, but borrowing amounts are much higher now. And we’re in the middle of a cost of living crisis, which wasn’t part of the equation when lenders stress tested applicants’ ability to pay. I think we’ll see house prices fall by at least 20% over the next year or two.”

Gaurav Shukla, sales manager at home me: “There is no doubt that there will be more repossessions than usual. There will be thousands of people whose products will be coming to and end in 2023, and who will be moving from 1% rates to rates of 6% and above. For many, this could mean very steep monthly payment increases. Some may choose to sell and move in with family, while others may default on payments and subsequently have their property repossessed. It is now time for lenders to come up with solutions, similar with the payment holidays that were put in place during Covid, to help their customers out and not go down the route of repossession. I’m hoping we see relaxed criteria around interest-only to ease the payments strain for a couple of years, at least until things settle.”

Riz Malik, director at R3 Mortgages: “Any rise in forced sales will come towards the end of next year, if at all. We are awaiting the outcome of the Chancellor’s meeting with lenders last week and information about the support measures that were discussed. In addition, lenders will only force a sale as a last resort after exhausting all other options and that takes time. The current administration also knows that rising repossessions would be the final nail in their coffin ahead of the next General Election so you cannot rule out Government intervention.”

Michael Webb, managing director at Mortgage Republic Limited: “An increase in repossessions is most definitely possible during 2023, and we are already seeing some return to the market following the restrictions placed upon banks to undertake them during Covid. However, the pandemic also showed us the power of the government to restrict the ability of the banks to undertake repossessions, and with the government hanging on for dear life, both economically and politically, it will be interesting to see if any interventions are put in place to restrict banks’ ability to repossess properties.”

Mark Robinson, managing director at Albion Forest Mortgages: “I think it highly likely that people may end up with serious financial issues. Over the past decade, many people have pushed their borrowing to its limits. This means that if rates stay high they could be paying hundreds of pounds extra on their mortgage if they have to remortgage in the next 6-12 months. Not only this, but other variable credit commitments could skyrocket as well, such as credit cards and store cards. Increased borrowing costs, coupled with rising energy bills and the cost of living generally, could take many people to the brink and see them struggle with their mortgage payments. How lenders react, and whether the government intervenes, is the great unknown.”