Buy-to-let arrears up 70% and repossessions up 88%
The number of buy-to-let mortgages in arrears rose by 70 per cent in the last year, while the number of repossessions increased by 88 per cent.
At the end of the first quarter of 2009, 3.09 per cent of all buy-to-let mortgages were at least three months in arrears - compared to 0.92 per cent a year ago.
However, the Council of Mortgage Lenders (CML) warns low interest rates reducing repayments skew the figures.
In terms of the total mortgage balance the CML claims the number of buy-to-let mortgages in arrears actually fell.
In the first quarter of 2009, 1,700 buy-to-let repossessions took place, up from 900 in the first quarter of last year.
In addition, there were 2,400 cases where a receiver of rent was newly appointed on buy-to-let mortgages more than three months in arrears up from 100in the first quarter of 2008.
The receiver of rent maintains the property and collects rent from tenants - passing it on to the lender - allowing the tenant to continue to live in the property while also ensuring that the cashflow to the lender continues.
Buy-to-let lending fell for the sixth consecutive quarter in the first three months of 2009.
Data from the Council of Mortgage Lenders show buy-to-let lending accounted for six per cent of all mortgage lending - down from 12 per cent a year ago.
A total of 22,400 new buy-to-let mortgages were advanced in the first quarter of 2009.
CML director general Michael Coogan said: "It is not surprising that buy-to-let lending continued to fall in the first quarter. Many buy-to-let lenders relied on wholesale markets rather than retail savings to fund their lending.
"Some have therefore had no access to the measures to support capital and new lending that have been available to deposit-takers. This, along with general housing market weakness, has influenced the decline in buy-to-let lending."
However, there is hope that buy-to-let is starting to see some green shoots.
David Whitaker, managing director of Mortgages for Business, explained he concurred with analysis from Mr Coogan of green shoot but no roots.
He explained low interest rates were helping those buy-to-let borrowers on tracker deals, but "those who took out a fixed rate deal in 2007, which seemed sensible at the time, are still up their at 6.99 per cent".
Mr Whitaker added: "The gifted amateur is edging back, but the get rich quick buyers will not re-enter the buy-to-let market."
Keshav Thukaram, managing director of Smartlandlord.co.uk., explained the number of buy-to-let mortgages has dropped to just 200 "meaningful" deals - but lenders are starting to be more open - although they are now judging customers not just on rental yields - but also the landlord's personal finances.
"Lenders are much more open than six months ago and are now talking about new products. But it will be three to six months before they start launching new deals," he said.
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