New data from the lending firm Octane Capital indicates that there has been a staggering 93% increase in the number of landlords who are behind on their mortgage payments compared to last year.
This rise is much steeper than the 22% uptick in mortgage arrears among homeowners.
Nonetheless, in 2023, homeowners were eight times more prone to falling behind compared to landlords. This trend simply indicates that the disparity between the two groups is narrowing.
Octane Capital’s CEO, Jonathan Samuels, remarked, “With interest rates at their highest point since 2008, we can see that the last base rate hike in August didn’t alleviate the financial pressures. Both landlords and homeowners are finding it increasingly difficult to manage the rising costs of their mortgage commitments.
“Even though homeowners have a higher tendency to miss payments, the dramatic surge in landlords facing arrears is concerning for the rental market,” he added.
“The rental housing sector is already experiencing an acute shortage, and this growing problem with buy-to-let arrears could exacerbate the situation, leading to landlords selling off properties to settle debts or, in the worst cases, losing their properties through repossession.”
An estimated 13,570 landlords found themselves in mortgage arrears in the last quarter of the previous year.
This number, though representing a mere 0.7% of all buy-to-let loans, is the highest observed in five years, both in quantity and as a proportion of the loans.
In 2023, there were 41,090 cases of landlords with mortgage arrears, averaging 10,273 per quarter, which is a 76% increase from 2022. This is significant considering that in 2022 there had been a -4.1% decrease in arrears, hinting at an earlier improvement (compared to 2021).