Many landlords have mortgage arrears with the danger of re-possession

The latest data from UK Finance reveals concerning trends in the buy-to-let (BTL) mortgage market, with an 18 percent increase in arrears compared to the previous quarter. BTL mortgage arrears, defined as 2.5 percent or more of the outstanding balance, have risen to 13,570. Additionally, 500 BTL mortgaged properties were repossessed in the fourth quarter of the year, marking an 11 percent increase from the previous quarter.

In contrast, the rise in home ownership mortgage arrears was more modest at 7.0 percent.

UK Finance highlights that there are 230,000 BTL mortgage holders whose fixed-rate deals are set to end this year. While the body asserts that lender stress tests have helped borrowers manage their mortgage payments, it acknowledges that external factors beyond lenders’ control can impact customers’ ability to meet their financial obligations.

Despite the increase in arrears and repossessions, UK Finance emphasizes that the total number of possessions remains low compared to long-term standards. It underscores that repossession is always considered a last resort after exploring other options.

Eric Leenders of UK Finance urges mortgage holders facing financial concerns to proactively reach out to their lenders to discuss available support options. He reassures borrowers that seeking assistance from lenders will not adversely affect their credit score and emphasizes that lenders have dedicated teams ready to provide guidance and assistance.

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