Credit, collections & insolvency news
Latest figures from UK Finance have shown that there was a substantial jump in the number of Buy-to-let (BTL) mortgages in arrears of 2.5 per cent or more of the outstanding balance – this was 123.9% higher year on year to 13,570 in Quarter 4 (Q4) 2023.
However, UK Finance points out that only 0.68% of all BTL mortgages are in arrears, which is lower than for owner-occupier mortgages, as it has been for many years.
There were 500 BTL repossessions during the quarter, which was an increase of 56% year on year.
Meanwhile Buy-to-let lending for purchases dropped by 56% to £1.8bn in the final quarter of 2023 compared to the same period a year earlier.
The trade body says this marks the lowest level of BTL activity for a decade excluding the months of the pandemic during which the housing market was shut down.
Remortgages were also down by 55% year on year to £4.3bn in Q4 2023.
UK Finance said “Interest rates play a pivotal role in property investment, directly impacting borrowing capacity and landlords’ return on investment. With higher rates reducing profitability, we have seen weaker demand for new BTL loans for house purchase.”