Buy-to-let arrears see dramatic 28% rise

What’s happened?
- “Buy-to-let arrears” means that landlords who’ve borrowed money to buy properties for renting out are struggling to keep up with their repayments.
- There’s been a 28% increase in these cases over the last three months, with a total of 8,980 cases reported.
How does this compare to homeowners?
- It’s not just landlords: the whole market is seeing more people struggling with mortgage repayments. 81,900 homeowners, to be precise, are finding it tough – that’s 7% more than the last quarter.
What’s the bigger picture?
- The situation is concerning, especially since renting is a big deal for many who can’t buy their own homes. With rents increasing, it’s a double-edged sword; landlords are charging more, yet many are still in arrears.
Who’s saying what?
- Adam Oldfield from Phoebus Software highlights the importance of the rental sector and suggests lenders should actively speak with their landlord clients to prevent the situation from getting worse. He also mentions a suggestion by Michael Gove about possibly delaying some property-related regulations (EPC regulations).
- UK Finance, the body giving these stats, explains that rising costs, such as mortgage rates and general living expenses, are reasons for this trend. They also mention that despite the increases, the percentages of those in arrears are still relatively small. But the emphasis is on getting support early if you’re struggling.
Any positive news?
- Yes! Lenders are prepared and have taken measures to help. They’ve set up things like the “Mortgage Charter” to help people before they face financial troubles. And they’ve assisted 200,000 borrowers in restructuring their payments to make things more manageable.
- Moreover, while there’s been an increase in property possessions due to these arrears, these numbers are still historically low, though they’re expected to rise because of ongoing financial pressures.
Key takeaway:
- If you’re a homeowner or landlord and think you might struggle with mortgage payments, don’t wait. Reach out to your lender sooner rather than later – there’s help available!