Fall in BTL Mortgage Arrears Despite Sector Growth

According to data from the Council of Mortgage Lenders, the number of landlords in arrears of three months or more stood at 13,400 at the end of June, a fall of 1,300 from three months previous, and 4,500 from a year ago. 1,300 buy-to-let properties were taken into possession in Q2 2014, compared to 1,400 in Q1.

While the number of landlords in serious arrears has fallen dramatically over the course of a year, the buy-to-let mortgage product range has grown even more dramatically – increasing by 52%.

However, according to Moneyfacts, the market is showing preference for borrowers with a proven history, squeezing out the riskier first-time landlords. Although the number of products available to first-time landlords increased by 33% compared to last year, the proportion of the BTL market available to them reduced from 93% to 82%.

The fall in serious arrears has been helped along by consistently high average rental returns. Although total annual returns have slipped from 11.3% in Q2 last year to 10.3%, it is still performing well above the 6.1% recorded in 2012.

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