More buy-to-lets but fewer arrears and repossessions miniature model house and hands on desk

More buy-to-lets but fewer arrears and repossessions

Buy-to-let mortgage landlords are seeing their finances improve as demand from tenants means homes are empty for less time and more rents are flowing in.

By the end of the first quarter of this year, the number of buy-to-let mortgages had surged by 10% from 1.5 million to 1.65 million, while serious arrears and repossessions all dropped significantly, said trade body the Council of Mortgage Lenders (CML).

CML director general Paul Smee said: “"Although complacency would be misplaced, the underlying picture continues to be one of improvement and a continuing reduction in mortgage arrears and repossessions.

“The message remains the same: don't delay in contacting your lender if you are experiencing temporary payment problems, as lenders want to help you resolve them and will only take possession of property as a last resort."

The CML buy-to-let arrears and repossessions report for the first quarter of 2015 showed significant decreases in landlord rent arrears, repossessions and cases where rent receivers were called in to manage private rented homes.

The CML explains that financial shocks generally lead to a rising level of arrears and repossessions, and the spectre of interest rate rises during the next 12 months could put some landlords under more financial stress.

"No-one should be lulled into a false sense of security that the current low interest rates we are experiencing will last forever. It's essential for borrowers themselves to have one eye on the future. Think through any borrowing taken on now to ensure it will still be affordable if and when rates rise,” said Smee.

Buy-to-let mortgage arrears and possessions - Q1 2015

  Q1 2015 Q1 2014 % change

Outstanding buy to let mortgages

1,650,500

1,506,000

10%

Mortgages more than 1.5% of the balance in arrears but property controlled by borrowers

8,100

10,300

-27%

Mortgages more than 3 months in arrears but property controlled by borrowers

10,200

12,800

-20%

Mortgages more than 3 months in arrears but property controlled by rent receiver

1,300

2,000

-35%

Mortgages more than 3 months in arrears with receiver appointed in period

300

500

-40%

Properties repossessed in period

800

1,400

-43%

Properties repossessed and under control of lender at end of period

1,300

1,900

-32%

Landlord Insurance

ADDED: 21st July 2015