Buy To Let Crisis - lending plummets and arrears soar

There’s been a huge rise in the number of buy to let property repossessions in the first quarter of 2024 compared to the same period 2023.

A report from lenders’ trade body UK Mortgage says there were 500 BTL mortgage possessions taken in Q4 2023, up 56.3 per cent on the same quarter a year previously.

And the same report reveals that at the end of Q4 2023 there were 13,570 BTL mortgages in arrears greater than 2.5 per cent of the outstanding balance. 

This was no less than 123.9 per cent higher than in the same quarter a year previously.

The report also gives a series of other stats from the sector.

For example, the value of new BTL lending for the UK in Q4 2023 was £6.3 billion, down 55.4 per cent compared with the same quarter in the previous year.

And the average gross BTL rental yield for the UK in Q4 2023 was 6.74 per cent, compared with 5.85 per cent in the same quarter in 2022.

A corresponding figure is that the average interest rate across all new BTL loans in the UK rose to 5.7 per cent in Q4 2023, up from 3.67 per cent a year previously. As a result, the average buy-to-let interest cover ratio (ICR) for the UK in Q4 2023 fell to 180 per cent, compared with 238 per cent a year previously.

The number of BTL fixed rate mortgages outstanding in Q4 2023 was 1.37 million, 1.7 per cent per cent up on a year previously. In contrast, the number of variable rate loans outstanding fell by 12.7 per cent to 0.62 million.