Number of BTL landlord repossessions jumps

Growing numbers of landlords are struggling to pay their mortgages and are having their rental homes repossessed, official figures reveal.

According to UK Finance, there were 440 buy to let landlords who had properties repossessed in the second quarter of 2023 – that’s up 7% from the first quarter.

And the number of BTL mortgages in arrears has rocketed by 28% in the same period – but that is 59% higher than in 2022.

With rising mortgage rates, there are now 8,980 landlords – double last year’s figure – in arrears.

Of those, 4,810 landlords have arrears that are between 2.5% and 5% of their mortgage balance, up 126% from last year.

And there are 2,300 landlords who are in arrears of between 5% and 10%. That is up by a third.

There are nearly 2,000 BTL landlords who are in arrears of more than 10%, a rise of 4%.

‘A worrying sign for the rental market’

Interactive Investor’s senior personal finance analyst, Myron Jobson, said: “The uptick in buy-to-let arrears is a worrying sign for the rental market.

“With mortgage rates creeping higher in the current quarter, the worry is there will be a new wave of landlords facing financial strain in the near future when they remortgage.

“For many landlords, the uptick in mortgage costs is the final straw after years of being squeezed by higher taxes.”

He added: “Landlords who are struggling financially due to mortgage arrears might try to offset their financial quagmire by raising the rent for their tenants.”

81,900 homeowners are in mortgage arrears

UK Finance also reveals that 81,900 homeowners are in mortgage arrears of 2.5% or more of their outstanding balance.

There has been a 12% increase in those in arrears of between 2.5% and 5%, that’s up 12%, and there’s a 12% rise, or 30,940 homeowners in arrears of between 5% and 10%.

Just this week, RICS warned that higher mortgage rates are having an effect on the UK’s housing market with increasing rents and sales plummeting.

House prices are also in decline, Halifax said this week, and growing numbers of home sellers are having to cut their asking price.

‘Homeowner and buy-to-let possessions ‘

A UK Finance spokesperson said: “The number of homeowner and buy-to-let possessions in (the second quarter) remain close to historic lows but are expected to continue to rise in line with our mortgage market forecast given the ongoing cost-of-living challenges.

“It’s important for homeowners and landlords to remember that there is support available to anyone struggling with their finances.

“If you think you might have difficulty making your mortgage payments, reach out to your lender early to find out the options available.”