Buy to Let

Landlords in significant mortgage arrears jump by 20%

Christina Hoghton
Written By:
Christina Hoghton

While landlords arrears have risen, the number of homeowners that are behind on their mortgage has fallen

The number of landlords who have fallen seriously behind on mortgage repayments has jumped by 20% in a year, UK Finance figures have revealed.

There were 1,200 buy-to-let mortgages in significant arrears of 10% or more of the outstanding in the last three months of 2017 – a fifth higher than the same period a year earlier.

Overall there were two per cent more mortgages in arrears of 2.5% or more of the balance, compared to 2016.

The number of buy-to-let mortgaged properties repossessed in the fourth quarter of 2017 was at 600, similar to the same quarter of the previous year.

However, separate data from the Ministry of Justice today showed landlord possession warrants has increased by 9% in the final quarter of 2017 from 2016.

London had the highest number of landlord repossessions in the country.

It is a trend that has also been noted by property firms.

Mark Pilling, managing director of Spicerhaart corporate sales, said: “Spicerhaart has also seen a growing trend of increasing repossessions in London, and it is not just lower cost houses, we have also seen an increase in repossessions of properties worth multi-millions.

“I think this is becoming more prevalent as interest-only deals from the 90s come to an end and landlords in London struggle to sell their properties at the prices they need to in order to clear their debt.”

Homeowner arrears down

UK Finance figures showed there were 24,700 homeowner mortgages with significant arrears of 10% in the fourth quarter of 2017 – broadly the same as a year earlier.

And the number of homeowner mortgaged properties repossessed in the fourth quarter of 2017 was 8% fewer than in the same quarter of the previous year.

Paul Smee, head of mortgages at UK Finance said: “Annual homeowner possessions currently stand at a 36-year low, with overall arrears and possessions continuing to decline.

“This reflects the mortgage industry’s continued commitment to appropriate and prudent lending.

“All potential borrowers are carefully assessed against their ability to pay back their loans, and lenders work closely with their customers to ensure that any payment issues are dealt with at an early stage.

“Anyone experiencing difficulty with their mortgage should contact their provider immediately.”