Buy To Let The term used to describe buying a property with the specific intention of renting it out rather than living in it Repossessions Massive Increase From Previous Year
In this year’s Q3 there has been a significant increase in the number of buy-to-let property repossessions in comparison to the same quarter in 2018.
A banking trade body has just released figures that claim there has been a 40% increase in numbers of buy to let repossessions from last year.
During July to September there were around 800 buy to let repossessions, whereas in the same period in 2018 there were 570.
However the number of buy to let mortgages in arrears of 2.5% or higher of the outstanding balance in 2019’s 3rd quarter was 4,550, this is 5% lower than in Q3 2018.
The numbers of BTL investors in arrears between 5 – 7.5% of the outstanding balance, fell by 21% over the year.
However surprisingly there was an increase of 9% in BTL investors in arrears of between 7.5 -10%, whereas those in arrears of 10% or more, fell by 1%.
The banking trade body believes that one of the main reasons for the increase in repossessions this year, is because of a ‘backlog of historic cases’.
Two years ago the city regulator changed rules for lenders to calculate how much borrowers owe each month when falling behind with payments; consequently many lenders are having to ‘investigate’ a multitude of cases on an individual basis and apply for BTL repossessions ‘only when all other options have been exhausted’.
A spokesperson for a trade association, said: ‘Repossessions for mortgage arrears take place for many different reasons.
“Mortgage interest relief changes, which are now almost fully implemented, the increasing cost of regulation and the ever-increasing time to repossess a property are all major factors.
“Since most repossessions of this kind lead to tenants being evicted it is vital that the next government actively supports the majority of landlords doing a good job to provide the homes to rent the country needs.”