Arrears Figures For Buy-To-Let Mortgages Concerning

Readers may be interested to note that, according to data from UK Finance, the number of buy-to-let mortgages that are in arrears has increased when comparing the last quarter of 2017 with the same quarter in 2016. Obviously this is disappointing to hear and let us hope that the situation improves in the remainder of this year and beyond.

Unfortunately, in the 4th quarter of last year, the number of buy-to-let mortgages that were in arrears by 2.5% of the mortgage balance or more grew by 2% to 5,100. Of those mortgages, 1,200 were in arrears by 10% or more of the mortgage balance. It is also interesting to read that there were 600 buy-to-let properties repossessed in the last quarter of 2017 with this being a similar figure to the 4th quarter of 2016.

It is interesting to compare those figures with those for owner occupied mortgages as there were falls in the number of such mortgages being in arrears when comparing the same quarters.

Of course, no lender wants to have to go down the route of having to repossess a property for a number of reasons. For instance, it is not pleasant from the homeowner’s point of view having to vacate the property especially if there are children involved. The borrower’s credit rating may be affected making it difficult to obtain another mortgage for a number of years as well as presenting problems in finding finance for other purposes such as buying a car. It could impact on the profitability of the mortgage lender as there are costs involved in repossessing a property that may not always be recovered. It puts increased pressure on the rental housing market with more people looking for properties to rent out.

Here at Commercial Mortgage link we will continue to provide interesting statistics relating to various types of lending such as residential mortgages, buy-to-let mortgages, business loans and commercial lending.

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