NEW: Landlords feeling economic heat, new mortgage arrears data shows

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If the Government needs evidence that landlords are struggling in the current economic climate, then the most recent mortgage arrears and repossessions figures should be sober reading within the dusty rooms of Whitehall.

Lenders have reported that the number of private landlords in arrears with their buy-to-let (BTL) mortgages has increased by 28% over the past three months.

There were 8,980 buy-to-let mortgages in arrears of 2.5 per cent or more of the outstanding balance in the second quarter of 2023.

Half of these mortgages in arrears were what UK Finance counts as ion the ‘lightest arrears’ band or those between 2.5 and 5 per cent of the outstanding balance.

It says this shows that problems are coming down the line – ‘lightest arrears’ are 41 per cent greater than in the previous quarter.

The figures also show landlords are being hit harder than home owners, with arrears building fastest among landlords.

For example – there were 81,900 homeowner mortgages in arrears of 2.5 per cent or more of the outstanding balance in the second quarter of 2023, seven per cent greater than in the previous quarter compared to 28% for landlords.

Stark

“Percentage increases are always going to look stark when starting from a low base,” says Sonia Fernandes, Principal, Mortgages at UK Finance.

“However, this does not take away from the fact that early arrears, 2.5 per cent – five per cent of balance, has increased for both homeowner mortgages and BTL.

“And for BTL landlords who are missing their mortgage payments, we are not seeing signs that this is because of rental arrears.

“As long as renters are able to keep up with their payments, lenders will typically allow them to stay in the property for the remainder of their lease, even if the landlord has missed their mortgage payments.”

Read the figures in full.

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