2024 BTL vs. Homeowner Mortgage Trends: UK Finance

According to the latest data from lender trade body UK Finance, buy-to-let landlords are doing better than homeowners in weathering the recent economic storm.

As the Bank of England holds interest rates steady at 5.25 per cent—the highest rate since February 2008— and the cost of living eases, banks and building societies report fewer buy-to-let mortgages falling into arrears.

UK Finance says the number of buy-to-let mortgages in serious arrears for the first three months of 2024 is broadly the same as Q4 2023, standing at 13,570 loans.

Homeowner loans in serious arrears have nudged up 3 per cent to 96,580  in Q1 2024.

However, the number of buy-to-let loans slipping into early arrears plunged by 11 per cent,  compared with a two per cent fall for homeowner loans.

However, the buy-to-let evictions were 20 per cent up on Q4 2023.

Arrears down, but repossessions up

Proportionately, 0.69 per cent of buy-to-let mortgages and 1.11 per cent of homeowner loans are in serious arrears. For perspective, UK Finance says the number of homeowner and buy-to-let loans in arrears in Q1 2009, at the peak of the financial crisis, was 209,600.

“The fall in loans in early arrears reflects mortgages in this early band moving into deeper arrears positions. It also points to fewer customers moving into this band and suggests we’ll see a limited increase in arrears cases for the next quarter,” said a UK Finance spokesman.

“While the percentage of mortgaged properties taken into possession has risen, this is mainly due to historic arrears cases now working through the court system.

“Possessions numbers remain very low compared to historic norms.”

Lenders repossessed 870 homeowner and 600 buy-to-let properties in Q1 2024, 26 per cent lower than the 1,980 taken back in pre-pandemic Q1 2019 and 89 per cent fewer than the 13,200 repossessed in Q! 2009, which was the peak of the repossession cycle during the financial crisis.

Download the UK Finance data and charts.

Buy-to-let mortgage FAQ

What is a buy-to-let mortgage?

A buy-to-let mortgage is a commercial loan that allows a property investor to purchase and rent out a home they do not live in.

What are serious mortgage arrears?

A mortgage in serious arrears is when the missed payments amount to 2.5 per cent or more of the outstanding mortgage balance.

What are early mortgage arrears?

Most lenders only consider a loan is in arrears once the borrower has missed two payments. These are known as early mortgage arrears.

What is UK Finance?

UK Finance is the trade body representing 300 lenders, such as banks, building societies and finance houses.

What do I do if I can’t pay my mortgage?

The best way to deal with a missed payment is to contact a debt adviser, like Stepchange or your lender, immediately, explain why you can’t pay, and try to negotiate a solution to the problem. Don’t worry about repossession—taking a home is the last resort for lenders.