Surge in Landlord Mortgage Arrears Doubles in a Year, Banking Industry Figures Reveal

According to data from the banking industry, there has been a significant increase in landlords falling behind on their mortgage payments, with buy-to-let mortgages in arrears more than doubling in the final quarter of 2023 compared to the same period in the previous year. The 124% rise is attributed to the impact of high mortgage rates, although it still represents only a fraction of the total number of mortgages held by landlords.

UK Finance reported 13,570 buy-to-let mortgages in arrears in the final quarter of 2023, marking an 18% increase from the previous quarter. London, in particular, has been hard hit, leading to challenges for both landlords and tenants. The surge in arrears has also resulted in the highest level of moves to repossess homes from landlords since the onset of the pandemic.

The National Residential Landlords Association highlighted that more than eight in 10 buy-to-let mortgages are on interest-only repayment terms, leaving landlords particularly vulnerable to rising mortgage rates. This situation has prompted many landlords to exit the market, exacerbating the shortage of rental homes.

Additionally, the figures revealed a rise in homeowner mortgage arrears, with 93,680 homeowners affected, marking a 7% increase from the previous quarter and a 25% increase from the same period a year earlier. Lenders and charities advise individuals facing payment difficulties to seek assistance early to mitigate the risk of repossession, emphasizing that discussing payment issues with mortgage lenders does not adversely impact credit scores or future borrowing ability.

Source: BBC News