Steep increase in landlords in mortgage arrears

posted by 3 years ago in News

There’s been a 20 per cent jump in the number of landlords in mortgage arrears, UK Finance figures have shown.

1,200 buy-to-let mortgages were in arrears of 10 per cent or more of the outstanding balance in the last three months of 2017. That’s a fifth higher than in the same quarter in 2016.

Financial difficulty

Tax changes and the length of time it takes to evict non-paying tenants are being blamed for the increase. There has been a 3 per cent surcharge on Stamp Duty for any buy-to-let properties bought. In addition, the amount of tax relief landlords are able to claim has reduced.

Commenting on the data, Paul Smee, Head of Mortgages at UK Finance said:

“Annual homeowner possessions currently stand at a 36 year low, with overall arrears and possessions continuing to decline. This reflects the mortgage industry’s continued commitment to appropriate and prudent lending.”

“All potential borrowers are carefully assessed against their ability to pay back their loans, and lenders work closely with their customers to ensure that any payment issues are dealt with at an early stage. Anyone experiencing difficulty with their mortgage should contact their provider immediately.”

Landlord repossessions

Ministry of Justice figures have revealed that the number of landlord possession warrants has increased by 9 per cent in the final quarter of 2017 from 2016. That’s despite the number of buy-to-let property repossessions being similar in the fourth quarter of 2017 to the same quarter a year earlier.

The highest number of landlord repossessions was in London.