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Fall in BTL Mortgage Arrears Despite Sector Growth

August 19, 2014 | Landlord News  

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According to data from the Council of Mortgage Lenders, the number of landlords in arrears of three months or more stood at 13,400 at the end of June, a fall of 1,300 from three months previous, and 4,500 from a year ago. 1,300 buy-to-let properties were taken into possession in Q2 2014, compared to 1,400 in Q1.

While the number of landlords in serious arrears has fallen dramatically over the course of a year, the buy-to-let mortgage product range has grown even more dramatically – increasing by 52%.

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However, according to Moneyfacts, the market is showing preference for borrowers with a proven history, squeezing out the riskier first-time landlords. Although the number of products available to first-time landlords increased by 33% compared to last year, the proportion of the BTL market available to them reduced from 93% to 82%.

The fall in serious arrears has been helped along by consistently high average rental returns. Although total annual returns have slipped from 11.3% in Q2 last year to 10.3%, it is still performing well above the 6.1% recorded in 2012.

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