8 February: Buy-To-Let Landlords Squeezed By Higher Costs
Figures published today by UK Finance, which represents the banking sector, show that mortgage arrears for both residential and buy-to-let borrowing jumped again in the final three months of 2023, revealing how cost pressures are biting in the wake of interest rate rises over the past two years, writes Jo Thornhill.
The Bank of England Bank Rate, which influences what lenders charge, rose from 0.1% in 2021 to its current level of 5.25% in August 2023. The latest Bank of England ‘hold’ was announced on 1 February.
UK Finances says there were 93,680 homeowner-occupier mortgages in arrears of 2.5% or more of the total outstanding loan balance in Q4 2023, 7% higher than in Q3.
The figure for buy-to-let mortgages in arrears at the same level (2.5% of the loan balance or more) was 18% higher than Q3 at 13,570, .
However, mortgages in arrears still account for a small proportion of the total market at just 1.07% of all homeowner mortgages outstanding and 0.69% of all buy-to-let mortgages outstanding in Q4 2023.
As well as arrears data, UK Finance said 540 homeowner mortgaged properties were repossessed in Q4 2023 (14% fewer than Q3) while 500 buy-to-let mortgaged properties were repossessed (11% higher than Q3).
Laura Suter, director of personal finance at AJ Bell, said: “The number of people in arrears on their mortgage has jumped by 25% in the past year, as homeowners feel…
