Buy to let arrears slow down
20/11/2009 - Repossessions still a problem
Previous Article - Article Index - Following Article
The Council of Mortgage Lenders has reported a growth in the Buy to Let Mortgage market for the first time in two years. Lending on buy to lets has increased by 10% in the period April to June. The total number of buy to let loans reached 23,700 with a total outstanding loan amount of 1,205,000 which equated to 11% of the total mortgage loans outstanding. Remortgage figures are lower than in the past as the lenders arrangement fees and current rates on offer for new mortgages make it unreasonable to remortgage.
However, the good news for landlords in financial trouble is that the cheaper cost of borrowing money has meant that there is less chance they will default on their mortgage and incur arrears. For the third month in a row there was a drop in the number of mortgage with arrears of more than 1.5% of the balance with a fall from 22,900 to 20,500, a total of 1.7% of outstanding buy to let loans.
Although there was a rise in the number of repossessions of buy to let properties, there was a sharp decline in the number of landlords seen to be in arrears, down in the last quarter from 2,500 to 1,700. The director general of the CML, Michael Coogan, said “Buy to let lenders are among those facing some of the biggest challenges in raising mortgage funding, so the improved figures are all the more welcome. Future demand for housing gin all tenures supported by lenders will remain strong, despite mortgage funding constraints and low construction rates”.
