More landlords with a buy-to-let mortgage fell into arrears in the second quarter of the year, new statistics reveal.
There was a small increase of just over 0.5% compared with the previous three months, to 13,570, figures from UK Finance show.
Serious arrears
BTL properties in early arrears fell by 6%, which the banking trade body says, means there will be a limited increase in arrears cases in the next quarter. But the decrease also partly reflects some customers previously in early arrears moving into more serious shortfalls.
Landlords are struggling to afford to keep their buy-to-let properties.”
Heather Powell, Head of Property at business advisory firm Blick Rothenberg, says “The April – June 24 mortgage arrears stats published today show that landlords are struggling to afford to keep their buy-to-let properties.”
Repossessions
She says 710 buy to let mortgage properties were repossessed in the quarter, 13% up on the first quarter of 2024.
“While these repossessions may release properties for families to buy, it will add further pressure to the rental market, where the demand for rentable properties is far higher than supply.
“It is likely that these repossessions have in part arisen where landlords increased their borrowings when remortgaging properties. Those landlords are now getting caught out by the significant increase in interest rates from September 2022.”
Charles Roe, Director of Mortgages at UK Finance, says: “The number of mortgages in arrears has remained broadly flat compared to the previous quarter, which is good news following recent increases.
“This reflects the fact that, while many households remain under pressure, the challenges of higher rates and the cost of living have begun to ease.”
