Latest data from lenders’ trade association UK Finance published today reveal only modest increases in number of buy-to-let properties being repossessed by banks and buildings societies.

New figures released today reveal how the government’s directive to lenders to offer landlords mortgage holidays has so far prevented a steep rise in repossessions during the crisis.

While mortgages arrears and possessions remain low, UK Finance’s update for Q1 2020 shows only a modest increase in arrears compared to the last quarter – the vast majority of which were seen in March as the COVID-19 crisis hit.

In the first quarter of the year, 640 buy-to-let mortgaged properties were repossessed, 8% more than in the same quarter of 2019.

UK Finance recorded 4,420 buy-to-let mortgages in arrears of 2.5% or more of the outstanding balance, 6% fewer than in the same quarter of the previous year.

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But of those, many landlords have even bigger problems as there were 1,170 buy-to-let mortgages with more significant arrears (representing 10% or more of the outstanding balance) – although this was 3% fewer than in the same quarter of the previous year.

UK Finance believes the relatively small increase in arrears compared to Q4 2019 is due to the early effects of Covid-19.

Covid effects

Callum Bilbe, data and research analyst, says: “While we did see a modest increase in arrears from Q4 2019 to Q1 2020, this rise relates to the very earliest effects of the Covid-19 outbreak at the start of March, with the payment holiday scheme being introduced shortly after this, helping to prevent further payment issues for borrowers who might be struggling.”

He adds that an increase in buy-to-let possessions compared to this time last year was due to the backlog of historic cases and ensuring that these are being processed on the same basis as the latest regulations.

UK Finance points out that the industry response to Covid-19 had been unprecedented, with more than 1.6 million mortgage payment holidays granted.

Read more about mortgage holidays.


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