The number of BTL loans in arrears has reached 13,570 in Q2 2024, 51% higher than the same period last year, revealed the latest UK Finance statistics.
Of the total, 2,840 BTL mortgages were within arrears of over 10% of balance — a year-on-year increase of 49%, and 15% higher than the previous quarter.
Meanwhile, 1,890 BTL mortgages were in arrears of between 7.5% and 10%, which is a 133% increase to the number reported in the same quarter last year, and a 19% jump from Q1 2024.
Compared to the previous quarter, the total number of BTL loans in arrears has only increased by 1%.
In addition, the number of BTL properties taken into possessions has also jumped up by 51% year-on-year — however, this is only a 13% rise when compared to the previous quarter.
“It's unsurprising to see an increase in buy-to-let arrears as landlords are being hammered from all corners, and this is likely to worsen,” said Ben Perks, managing director at Orchard Financial Advisers.
Michelle Lawson, director at Lawson Financial, added: “The telling news is the arrears increasing on BTL properties, which reflects the relentless pressure on landlords and the downtrodden PRS.
“This government really needs to get a grip, and quickly, on the housing crisis for the most vulnerable in society — not doing so will decrease stock, increase demand on lower supply and push rents up further.
“Private landlords should be seen as part of the solution and not the problem.”
Richard Pike, chief sales and marketing officer at Phoebus, said: “A 13% increase in possessions of BTLs in the second quarter of 2024 might come as a blow to some.
“However, we can probably attribute a portion of this to the fallout from the previous high energy and general costs of living that have taken their toll on renters and landlords alike.
“Now that inflation and energy prices have dropped, and the market is so much more buoyant as we move through the second half of 2024, I would hope that the equivalent figures this time next year will look a lot more promising.”
Mel Spencer of Target Group stated: “The rise in the number of possessions has continued an upward trajectory all year, with both homeowner and BTL possessions on the rise — the biggest surprise may be the number of BTL possessions up a whopping 51% year-on-year.
“The pressures on landlords and tenants have been increasing exponentially with rising mortgage rates and increasing tax pressures forcing many landlords to relay the costs down to tenants in increased rents.
“Today’s figures demonstrate that, for some, those pressures have just become far too much, but it is alarming as it will further decrease the supply of rental housing.
“The one positive is that while the number of arrears, compared to last year, are still up 51% for BTL and 17% for homeowners, they have levelled off this quarter, hopefully reflecting the top of the curve and the start of a downward trend as inflationary pressures recede.”
