CPS Homes

As buy-to-let mortgage arrears soar, what practical steps can landlords take?

As the Bank of England base rate continues to rise, recent data from mortgage lenders’ trade body, UK Finance, shows a huge increase in buy-to-let mortgage arrears, leaving many landlords with a decision to make.


In the second quarter of 2023 (April-June), there were 8,980 buy-to-let mortgages in arrears of 2.5% or more of the outstanding balance, which is a 28% increase on the previous quarter (January-March).

Within the lightest arrears band of 2.5%-5% of the outstanding balance, there were 4,810 buy-to-let mortgages in arrears, which is a huge 41% increase from the previous quarter.

In all, lenders took back possession of 440 properties with buy-to-let mortgages, which represents a 7% increase on the previous quarter.

If you’re already struggling or think you may struggle when your fixed-term mortgage comes to an end, we’ve come up with three practical options for you…

1.  If you’re within 4-6 months of your current fixed-term ending and you’re concerned rates will continue to rise, your existing lender is likely to let you ‘lock in’ a new deal now. But if rates improve, you can usually take advantage of a better rate as long it’s before the start date of the new product. Don’t forget: if your fixed-term is ending, you aren’t tied to the same lender. A mortgage broker will have access to a far greater number of products and promotional rates than you would be able to find flying solo.

If you haven’t reviewed your mortgage product in a while, we can put you in touch with a specialist buy-to-let broker who has helped many of our clients. Just let us know if you want their help.

2.  Landlords with experience of occupants who don’t pay their rent on time, who are only one late payment away from a missed mortgage payment, may wish to consider a Guaranteed Rent Service that gives them the assurance they’ll receive the same sum of money into their bank account on the same day every month. 

Whilst you may not receive the full market value, you’re guaranteed to avoid the dreaded ‘void periods’ where no rent is coming in and you’re liable for utility bills + council tax. On top of this, there are no management or letting fees to pay. Check out our Guaranteed Rent service for more information.

3.  If you’ve decided ‘enough is enough’, you wouldn’t be alone in that way of thinking. Whether it be rising interest rates, an increasing amount of red tape on lettings in Wales and the UK as a whole, or a combination of both, we’ve spoken to a lot of landlords who are considering selling up and exiting the buy-to-let market altogether.

We’ve got plenty of investors and residential buyers looking to secure their next purchase, so why not find out what your property is worth in today’s market? Make contact with our Sales Team today.

15 August 2023

The information contained within this article was correct at the date of publishing and is not guaranteed to remain correct in the present day.

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