CashNews.co
The number of buy to let (BTL) mortgaged properties in arrears in the UK has increased slightly, the latest data from UK Finance reveals.
However, the overall proportion of mortgages in arrears remains low, and the number of homeowner properties in arrears has fallen.
UK Finance’s data shows that the number of BTL properties in arrears rose by just over 0.5% to 13,570 in the second quarter of 2024 compared to the previous quarter.
While this represents a small increase, it is still well below the peak seen during the global financial crisis.
Proportion of mortgages in arrears
Overall, the proportion of mortgages in arrears remains low, at 1.10% of homeowner mortgages and 0.69% of BTL mortgages.
In fact, the number of homeowner and BTL properties in early arrears fell by 3% and 6% respectively, suggesting that fewer customers are falling behind on their mortgage payments.
UK Finance said: “This points to fewer customers falling into early arrears and suggests we’ll see a limited increase in arrears cases in the next quarter.
“However, the decrease also partly reflects some customers previously in early arrears moving into more serious arrears shortfalls.”
Homeowner mortgages in arrears
The number of homeowner mortgages in arrears fell by less than 0.5% to 96,070 in the second quarter of 2024 compared to the previous quarter.
For comparison, the number of homeowner and BTL mortgages in arrears in Q1 2009 was 209,600 – almost twice the 109,650 seen in the first quarter of this year.
While the percentage of mortgaged properties taken into possession has risen, this is largely due to the HM Courts Service increasing capacity to work through historic arrears cases.
Possessions numbers remain very low compared to historic norms, with a total of 1,690 homeowner and BTL mortgaged properties being possessed in Q2 2024.
BTL mortgage market continues to ‘normalise’
The commercial director of Paragon Bank’s Mortgages, Russell Anderson, said: “UK Finance’s buy to let update is positive and acts as evidence of the market continuing to normalise following the challenging economic and political conditions experienced last year.
“The figures reveal strong growth in total gross lending, in both the value and number of loans written, since the previous quarter and when compared to the same period in 2023.
“Drilling down into the data, we that the maturities continue to be a key driver of business, with remortgaging during the quarter valuing £6.2 billion, the highest since the end of 2022.
“Encouragingly, we also see that landlords are actively growing their portfolios, with the value of purchases increasing consecutively during the last three quarters to £2.4 billion.”
He adds: “If we compare this number with the £2.7 billion of buy to let mortgages written for purchases in second quarter of 2019, we see that today’s market has almost recovered to pre-pandemic levels.”