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A growing number of landlords are falling into mortgage arrears compared to their residential counterparts, UK Finance data shows.

Between the third and fourth quarters of 2023 buy-to-let arrears cases increased by 18%, compared to 7% for owner-occupiers.

There are still far more residential cases however, at 93,680 compared to 13,570 in buy-to-let.

Adam Oldfield, chief revenue officer at Phoebus Software, said: “The level of arrears and possessions in the buy-to-let sphere is a continuing concern for lenders, who are no doubt highly aware of the mood in Europe, where fallout from the struggling US property market has most recently hit Germany’s Deutsche PBB, whose bonds this week slumped over concern about the bank’s property exposure.”

More landlords are also seeing their properties get repossessed, rising by 11% in the quarter, compared to a 14% fall among owner-occupiers.

Some 500 buy-to-let mortgaged properties were taken into possession in Q4, versus 540 homeowner mortgaged properties.

Mark Tosetti, group partnerships director at Movera, a group of home moving businesses including ONP Solicitors, said: “Unfortunately these figures show that mortgage arears figures continued to climb over the last quarter, particularly for buy-to-let properties. Landlords are having a particularly tough time. However, it’s good to see homeowner possessions falling.

“Hopefully, over the current quarter, arrears and possessions levels will improve as confidence returns to the market as we seek positive indicators of interest rates looking to decrease in 2024.”

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