0:01 AM, 19th May 2025, About 8 months ago
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The number of buy to let mortgages in arrears has fallen by 6% from the previous quarter, reaching 11,830, or 0.61% of all BTL loans, data from UK Finance reveals.
It also reveals that there has been a big decline in mortgage arrears for the first quarter of 2025, marking the lowest level since the 2009 financial crisis.
However, a slight uptick in property repossessions has raised concerns amid ongoing cost-of-living challenges.
Homeowner mortgages also saw a 2% fall, with 90,140 loans in arrears, equating to 1.03% of the total.
This contrasts sharply with the 209,600 mortgages in arrears during Q1 2009, the peak of the global financial downturn.
Toby Leek, the NAEA Propertymark president, said: “It’s extremely positive to see to see mortgage arrears drop to their lowest level since 2009.
“There has been much progress within the sector to help ensure the overall lending criteria is more robust and offers consumers a higher degree of safety regarding their affordability.”
He added: “However, it is concerning to see repossessions witness an increase within the first quarter of 2025, as it demonstrates there is still an aftershock regarding the recent surge in the cost of living and support available to those who may need genuine help in the short to medium term.”
Early arrears also declined, UK Finance says, suggesting that any future increases in arrears will likely remain modest.
Despite this positive trend, repossessions rose, with 2,030 homeowners and BTL properties taken back by lenders in Q1 2025.
While this figure is 85% lower than the 13,200 repossessions in Q1 2009, it indicates a lingering financial strain for some borrowers.
Most repossessions involve mortgages taken out over a decade ago, with lenders noting that repossession often allows struggling borrowers to exit their mortgage while preserving as much home equity as possible.
UK Finance emphasised that lenders prioritise keeping customers in their homes, resorting to repossession only after exhausting all other options.
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