Light at the end of the tunnel for buy to let landlords

According to new figures released from the buy to let mortgage rates market specialist, Chl Mortgages, the amount of arrears levels are at the lowest they have been for the past four years.

Their figures shows that by the close of June only 1.5% of all buy to let mortgages were in arrears in the banks; which is almost 44 basis points lower than the average revealed by CML (Council of Mortgage Lenders).

This means that buy to let mortgage arrears are actually beginning to decrease at a steady rate as a pattern of falling arrears is being observed over a two month period. According to the CML, the buy to let arrears numbers fell during the first quarter of 2013 which is actually quite an accomplishment given the fact that there was a boom in buy to let mortgage rates as the market became saturated with investors that wanted in on the high rent demands.

With this in mind, it would seem that arrears would be more frequent as unprepared landlords took on new properties simply because they were approved, but instead the opposite occurred. It seems that even though the best mortgage rates were out on the market for savvy landlords during the beginning of this year, the arrears rates continued to fall. The overall arrears rate for the first quarter of the year sat at about 1.9% which is an astounding number.

Although the second quarter numbers are not set to officially be released until August, speculation from the market and from property experts is that the numbers will hold steady or decline any more as there has not been any significant market changes or changes in the overall market conditions. One of the reasons for the decrease in arrears may be the fact that many properties are now managed by a rent receiver.

Of the properties that are owned by landlords in the UK, 95% are actually rented out at the moment while 65% of the properties that are occupied by tenants have seen their value increase as the terms of the agreements are being met and properties are moving from default back into a positive situation. With a helping hand and some advice it seems many landlords are actually able to get out from behind a bad mortgage and turn the situation around.

 

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