One in 50 Buy-to-let mortgages in arrears

Friday, 20 February 2009 10:27

Over one in 50 buy-to-let mortgages are now more than three months in arrears.

Data from the Council of Mortgage Lenders show 2.32 per cent of buy-to-let loans ended 2008 more than three months in arrears.

A total of 4,100 buy-to-let properties were repossessed last year

New buy-to-let lending fell 56 per cent per cent in the final quarter of 2008 on the year before.

Concern raised for tenants in the last few months, who could face eviction with little notice if they are unaware their landlord is in arrears and facing repossession, was quashed by the CML who highlighted that from April 6th all tenants will receive increased notice of any court hearing for mortgage possession (around five to seven weeks).

The CML said tenants need to open any correspondence addressed to 'the occupier', as this is how they will receive notice of any action a lender might be taking against the borrower or landlord.

Lenders send such a notice to all mortgaged properties where they are taking a possession claim to court, whether the mortgage is a buy-to-let mortgage or not.

This means even tenants whose landlords have failed to inform their lender they are renting out their property, which is always a contractual requirement of any mortgage, receive notice of any court action.

The CML only began collecting data on buy-to-let in 2006, but on the basis of previous half-yearly data, the final quarter of 2008 saw the lowest quarterly lending figure since 2003.

There were 37,000 new loans, worth £3.9 billion in Q4, with outstanding buy-to-let mortgages representing around 10 per cent of all loans, and around 11 per cent of the value of all lending, at the end of 2008.

At the end of 2008 £138 billion was the outstanding value of buy-to-let, compared with £121 billion at the end of 2007.

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