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Liverpool Echo
Liverpool Echo
Holly Williams & Lottie Gibbons

Santander issues immediate warning to anyone with a mortgage

Santander has issued a warning to anyone with a mortgage amid fears house prices could tumble back to 2021 levels.

The high street lender is predicting a 10% fall in house prices this year as interest rate hikes knock homebuyer demand. Santander said mortgage borrower arrears remained low so far, but it saw a small number of business customers defaulting in the final months of 2022.

Mike Regnier, chief executive of Santander UK, said there were signs that some borrowers are struggling, even if they are keeping up with their mortgage repayments for now. He said the bank has seen a 12% increase in customers using their overdraft, as well as a 24% jump in customers using buy now, pay later products.

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Mr Regnier said: "That's a worry for us, because we know these customers are more likely to enter arrears. We are keeping an eye on them and they're some of the customers we're contacting and reaching out to to offer support."

There are also 400,000 of its borrowers coming off fixed-rate deals, who are due to face a £313 increase in repayments a month on average, while the bank has also seen energy bills double year-on-year for around 900,000 of its customers.

Its gloomy prediction for the housing market follows the latest figures from Nationwide Building Society on Wednesday showing the average UK property price fell by 0.6% in January.

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