About two million home-owners are on mortgage holidays, according to a new estimate.
That is equivalent to almost one in five people with mortgages and is 400,000 more than the last official figure of 1.6 million from the banking industry 12 days ago.
Capital Economics, the consultancy, totted up figures from the five biggest banks in their first-quarter filings last week and then scaled up for the wider industry, including building societies. Lenders have agreed to give borrowers a three-month break from mortgage payments if they request it.
Hansen Lu, of Capital Economics, said: “The data now point to two million households with mortgage holidays. This suggests that the peak in arrears may be much higher than during the global financial crisis.”
While people taking mortgage holidays do not count as being in arrears, it suggests that they are in financial trouble and some of them could later default. UK Finance, which represents big lenders, has said previously that new mortgage holiday applications amounted to 700,000 between April 1 and April 24, which is 29,000 per day. Mr Lu said that the higher standard of lending and greater capital cushions meant that the outlook for possessions and bad debts was less gloomy.
The five big high street banks, which account for 57 per cent of residential mortgages, reported 1.15 million customers on mortgage holiday last week, led by Lloyds with 404,000 and Barclays with 238,000.