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Buy to let arrears drops 17%, says CML

The Council of Mortgage Lenders says the peak in buy to let arrears may have passed as the number of mortgages in arrears for three months or more dropped 17 per cent in Q2 this year.

In total there were 29,400 buy to let mortgages in arrears of three months or more in the second three months of 2009, down 17 per cent from 35,600 in the previous quarter.

Buy to let repossessions remained unchanged quarter on quarter at 1,400.

The number of buy to let loans dropped just 4 per cent in Q2 this year, from 22,400 during the first three months of the year to 21,600 in the second quarter.

The fall in advances in the second quarter was concentrated in remortgaging, with new lending up 5 per cent on the previous three months.

CML senior policy adviser Rob Thomas says: “So long as properties have paying tenants, landlords now have much greater ability to service mortgage payments and we expect arrears to continue to fall as landlords are helped by lower interest rates.

“Whilst house price falls have limited the scope for some landlords to remortgage, there is no evidence that landlords are exiting the market in large numbers and some landlords have the opportunity to make acquisitions and take advantage of higher yields. But new lending to the buy-to-let market will continue to be constrained by the shortage of funding.”

The Paragon Group of Companies chief executive Nigel Terrington says: “Today’s arrears figures demonstrate the robust credit quality of buy-to-let lending and the strong performance of landlords, even in a recessionary environment.”



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