At least 710 buy-to-let mortgaged properties were repossessed in the second quarter of the year, 13% up on the previous quarter and 51% up year-on-year.

Latest figures from UK Finance show that there were 13,570 buy-to-let mortgages in arrears of 2.5% or more of the outstanding balance, 1% higher than in the previous quarter. These figures have been rising since at least February.

Within the total, 5,660 were in the lowest arrears band - between 2.5 and 5% of the outstanding balance - 6% fewer than in the previous quarter but up 20% year-on-year.

However, there was a 19% rise in arrears in those mortgages between 7.5% and 10% of the outstanding balance (1,890) – up 133% on the year – and a 15% rise in mortgages over 10% of the outstanding balance (2,840) – up 49% on the year.

Mortgages in arrears accounted for 1.1% of all homeowner mortgages outstanding, and 0.69% of all buy-to-let mortgages outstanding in the second quarter.

Lee Grandin (pictured) at Landlord Mortgages has previously explained that landlord mortgage arrears are unlikely to occur because the rent isn’t high enough but could be due to a reduction in income from a landlord’s occupation or other rising costs such as a mortgage.

UK Finance found that 980 homeowner mortgaged properties were repossessed in the second quarter of 2024, 8% more than in the previous quarter, while there were 96,070 homeowner mortgages in arrears of 2.5% or more of the outstanding balance, broadly unchanged from the previous quarter.

Late arrears

David Miller, divisional director at Spicerhaart Corporate Sales, says this growing cohort of borrowers urgently needs to seek support.

He adds: “The upward growth of late arrears will be key driver in the rise in possessions, although it is positive to see they continue to account for a small proportion of the overall customers in arrears.

“It demonstrates that lenders are continuing to be proactive and proving that possessions remain a last resort.”