Home > News > Sharp rise in landlords and homeowners in mortgage arrears

Sharp rise in landlords and homeowners in mortgage arrears

The number of buy-to-let mortgages in arrears has doubled in a year while the number of homeowners falling behind on payments has also jumped, prompting warnings that the sharp rise “should be ringing alarm bells in Downing Street”.

Two sets of official data underlined how 14 consecutive interest rate increases, besides the broader cost of living pressures, have piled the pain on many households, with landlords, in particular, struggling.

For many amateur landlords, their property portfolio is their main “pension”, but Ranald Mitchell, a mortgage broker Charwin Private Clients director, said: “What was once a dream has turned into a nightmare for many.” Justin Moy, the managing director of EHF Mortgages, said the situation was “becoming a disaster for all types of landlord”.

The banking trade body UK Finance said there were 11,540 buy-to-let mortgages in arrears in the period 1 July to 30 September this year – up 29% on the previous quarter, and up 100% on the 5,760 that were in the red during the same period last year.

Meanwhile, 87,930 homeowner mortgages were in arrears during the three months ending on 30 September. This was 7% higher than the figure for the previous three months, up 18% annually.

A succession of surveys have shown that hundreds of thousands of UK households have recently missed or defaulted on a mortgage or rent payment, with many forced to make big changes to their finances – from selling up and moving to a cheaper home to stopping pension contributions – as they struggle to cope with dramatically higher costs.

Britain’s amateur landlords have enjoyed years of strong house price growth, while intense competition among tenants has sent rents soaring. Like owner-occupiers and would-be buyers, many have seen their monthly mortgage costs double, or worse, since interest rates started their upward march.

In many cases, their new mortgage payments are higher than the rent they are getting, while some struggling tenants have been unable to pay their rent, and some have moved out, increasing landlords’ “void periods” when properties sit empty.

Craig Fish at the broker Lodestone Mortgages & Protection said the buy-to-let sector “has been hit harder than any of late”, adding: “Worse is yet to come … I predict a horrible ending.”

Separate figures on Thursday from the Ministry of Justice covering England and Wales showed that mortgage possession actions – where, for example, a bank is considering taking back property from a customer who has fallen behind with their payments – have risen by up to 18% in a year.

HICH LTD has continually raised the quality standards in the UK property survey market. Our multi-award-winning property survey service has made us the leading reference in the property survey market.

We offer property survey services of the highest quality. Using state-of-the-art equipment, we provide excellent property surveys at affordable prices. Our prices are based on the number of rooms rather than the value of the properties, so you will always get the best value for money with our services.

Please look at our Trustpilot page and see why customers have chosen us as their favourite property survey provider!

At HICH LTD, we work to serve our clients and make the world a better place for everyone. We actively collaborate with NGOs to promote environmental, social, and charitable causes. If you want to know more about our efforts or how you can help, contact us at admin@hich-ltd.co.uk.

HICH LTD extends a warm invitation to contractors and service providers throughout the UK to join our network; by joining the Contractors and Service Providers Network, you will enjoy benefits such as a significant increase in customer flow, advertising on our high-traffic website, and direct contact with thousands of customers in your postcode area. Find more information here or by following the QR code in the video.