The Council of Mortgage Lenders has revealed that figures for buy-to-let arrears are increasing amid concerns the sector may suffer a rise in repossessions.
The CML will reveal its finalised statistics on buy-tolet arrears and repossessions next week but the early indications are that the sector may have to ride out a rocky period in the current environment of rising interest rates.
Spokesman Bernard Clarke says: “The proportion of loans in arrears is lower than on mainstream mortgages but there are indications that the gap is narrowing.”
Solicitors Moore and Blatch, which advises lenders looking to repossess homes, says its lender survey has shown that the buy-to-let market was the second-most likely sector in the mortgage industry after high-income-multiple business to be affected by rising arrears and repossessions.
But BTL lenders insist that the market is in good shape although they also admit that as the sector matures it is likely to suffer higher arrears.
Moore and Blatch head of lender services Paul Walshe says: “Buy to let is still a good ship and there is a strong take-up. Maybe, though, it could become a victim of its own success because as more investors come in, some will get into trouble.”
Mortgage Express head of BTL Gus Park says: “You would expect an increase in arrears as the market matures but we expect arrears to remain stable.”