According to UK Finance there were 8,980 BTL mortgages in arrears of 2.5% or more of the outstanding balance in Q2 2023, a 28% increase on Q1.
The data from UK Finance’s report also reveals that 440 BTL properties were taken into possession in Q2, a 7% rise from the previous quarter.
Industry professionals have reacted to the figures.
Riz Malik, founder and director at R3 Mortgages, commented: “It seems that an increasing number of BTL landlords are encountering serious financial challenges.
“Beyond escalating borrowing expenses, unpaid rents stand as a significant factor [and] when landlords aim to offload their properties, the timing couldn't be less favourable in recent memory.
“Even at auctions, properties remain unsold; the mortgage charter offers no assistance to these landlords, despite their essential role in supplying housing in the private rental market.”
Graham Cox, founder of SelfEmployedMortgageHub.com, added: “The surge in arrears was bound to happen and the outlook for many landlords is bleak.
“The increase in landlord repossessions is unsurprising, as many are highly leveraged and refinancing costs have soared.
“Some will have pushed up rents to compensate however, increasing void periods and tenants in arrears due to the cost of living has left overexposed landlords in difficulty.”
Stephen Perkins, MD at Yellow Brick Mortgages, also said: “Tenants struggling with keeping up with rent is no surprise given the challenges across all household costs; something has to give.
“There are further challenges for landlords with their increased cost of BTL mortgages and rent being missed by tenants.”
