Landlords Experiencing Hardship As Buy to Let Arrears Rise… 

Landlords Experiencing Hardship As Buy to Let Arrears Rise… 

According to specialist property lending experts Octane Capital, landlords are feeling the pinch of successive rate hikes. They have revealed that cases of arrears in the buy-to-let sector are worsening at a far faster rate than for homeowners. 

Cases of buy-to-let arrears of more than 2.5% of the loan amount have risen by 42.6% in the last four years – 4,930 in Q1 2019, to 7,030 in Q1 2023. 

The cases of arrears for homeowners over the same period have, however, declined by 8.6% – 83,870 in Q1 2019, to 76,630 in Q1 2023. 

To obtain this information, Octane Capital analysed figures on the number of mortgages that have dropped into arrears by 2.5% or more of the mortgage balance. They then compared the split between the BTL and residential sectors and how each compared to the pre-pandemic market.  

Their findings suggested that fewer landlords are being shielded from the current economic climate, with both mortgage rates and energy prices increasing at a faster rate than rents. 

In Q1 of this year, there were 76,630 homeowners in arrears of 2.5% or more of their outstanding mortgage balance, which accounts to 0.87% of total homeowner loans outstanding. This has hovered around this mark the past four years. 

Octane Capital chief executive officer Jonathan Samuels says: “It’s striking that buy-to-let landlords are becoming less shielded over time from the economic conditions, suggesting they are unable to entirely recoup their lost income in the form of higher rents.” 

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PLEASE NOTE: Article written 12th July 2023. Information contained within this article is likely to change and therefore should not be relied upon or form part of any form of decision making without seeking professional advice. * 


Any guidance and/or advice contained within this document is subject to the UK regulatory regime and is therefore restricted to consumers based in the UK. Any technical or regulatory information contained within this document was correct at the time of producing it but as it may be subject to change it should not be exclusively relied upon when making a financial decision. The Financial Conduct Authority does not regulate advice on Buy to Let mortgages.  

Article written: July 2023                                                                                                        120723 MZ000277 

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