Landlord mortgage arrears soar by 93% in a year

Landlord mortgage arrears soar by 93% in a year

0:03 AM, 1st March 2024, About 5 months ago

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More landlords are struggling to pay their mortgages than ever before, new data reveals.

Octane Capital, a specialist property lender, has analysed data from UK Finance which shows that 13,570 landlords fell behind on their mortgage payments in the last quarter of 2023.

That’s a shocking 93% rise from the first quarter of the same year.

It also represents 0.7% of all buy to let loans, the highest percentage and number of arrears in the past five years.

‘Landlords and homeowners alike are struggling’

Octane’s chief executive, Jonathan Samuels, said: “Interest rates remain at their highest since 2008 and it’s clear that while we haven’t seen the base rate increase since August of last year, both landlords and homeowners alike are struggling to keep pace with the increased cost of their mortgage.

“While homeowners are more likely to fall behind on their payments, the sharp increase in landlord arrears is a worrying sign for the rental sector.”

He added: “There’s already a desperate shortage of rental homes available to serve the huge demand from tenants.

“An increase in buy to let arrears suggests that this issue could be set to intensify as landlords offload their portfolios to pay their debts, or worse, see them repossessed.”

41,090 landlords were in arrears in 2023

In total, 41,090 landlords were in arrears in 2023, a 76% increase from 2022, when arrears had declined by 4.1% from the previous year.

Homeowners also faced difficulties in meeting their mortgage obligations, with 85,028 falling into arrears in 2023, a 13% increase from 2022, which had seen an 8% decrease from 2021.

However, homeowners were still more likely to be in arrears than landlords, with over eight times as many cases in 2023.

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