The number of landlords with buy-to-let mortgages in arrears has leapt by 19% over the past three months, latest figures from UK Finance reveal.
The organisation, which represents the UK’s mortgage lenders and personal finance firms, reveals that there were 5,400 buy-to-let mortgages in arrears last quarter owing more than 2.5% of the outstanding balance.
Of these, 1,350 were more serious arrears owing 10% or more of the balance.
Jonathan Harris, managing director of mortgage broker Forensic Property Finance, says: “The uptick of buy-to-let mortgages in arrears is from a low base, with the overall picture suggesting current levels remain lower than in previous years.”
UK Finance says this is largely down to the ‘mortgage holiday’ its members have offered struggling landlords, and the moratorium on repossessions enforced during the pandemic.
Just 230 buy-to-let mortgaged properties were taken into possession in the third quarter of 2020, 71 per cent fewer than in the same quarter of the previous year.
“Following the industry moratorium on involuntary possessions, these low possessions numbers in Q3 2020 for the most part reflect cases where the customer requested the possession to go ahead or where the property was vacant,” says UK Finance.
Harris adds: “The past few months have been difficult for landlords, however, with evictions put on hold, and many may be tempted to sell up once they have an opportunity to do so.”
But however worrying the leap in arrears may seem, the situation for landlords remains mild compared to the darkest day following the global financial crisis, when an estimated 14,000 buy-to-let mortgages were in arrears.