Mixed credit insights for July
The latest credit data from Centrix presented a mixed picture.
Overall arrear volumes eased in June, with the number of people behind on payments falling to 465,000, down 9,000 month-on-month. While consumer arrears remain up 9% year-on-year, the month-to-month changes are marginal.
However, consumer utility arrears, particularly in retail energy, have worsened over the past 12 months due to winter and the ongoing cost-of-living crisis.
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Mortgage and financial hardship trends
Mortgage delinquencies improved slightly in June, with 21,500 home loans reported as past due, down by 500 from last month.
Nevertheless, mortgage arrears are still 11% higher year-on-year. Additionally, financial hardship reports have risen by 27.7% year-on-year, with 13,500 accounts currently in financial hardship, nearly half of which relate to mortgage payment difficulties.
“Month-on-month, mortgage delinquencies improved in June, with 21,500 home loans now reported as past due,” Keith McLaughlin (pictured above), managing director. “Despite this, mortgage arrears remain 11% higher year-on-year.”
New lending and business credit
New mortgage lending saw a 7.7% increase year-on-year in June, while non-mortgage lending decreased by 13%.
Consumer credit demand remains flat compared to 2023, though retail energy new customer enquiries are up nearly 10% year-on-year.
Business credit demand increased by 11% year-on-year, particularly in the property and hospitality sectors.
However, company liquidations are up 19% year-on-year, with the construction and property industries being the hardest hit.
“Company liquidations across the country are up 19% year-on-year in June - up to 216 in June 2024 compared to 176 in 2023,” McLaughlin said.
Centrix on economic outlook
Reflecting on Q2, consumers have generally fared better than businesses, with an overall stabilisation of arrears. However, businesses have faced significant challenges, with a sharp increase in liquidations indicating prolonged difficulties.
“As we move through the next quarter and beyond, it’s important that those seeking to effectively plan for their future seek out advice early to best safeguard their financial wellbeing,” McLaughlin said.
Read Centrix’s July Credit Indicator Report in full. Compare the latest figures with the previous report.
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