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The buy-to-let market showed the first signs of stabilising in the last three months as arrears improved significantly, according to UK mortgage lenders.

Latest figures from the Council of Mortgage Lenders fund that there were 21,600 new buy-to-let loans advanced in the second quarter, a relatively modest 4% decline from 22,400 in the preceding three months. But buy-to-let arrears showed considerable improvement in all measures.

The CML found that there were 29,400 mortgages in arrears of three months or more – 2.49% of all buy-to-let mortgages – down 17% from 35,600 in the first three months of 2009. And the number of mortgages in arrears of more than 1.5% arrears fell 20% from 28,800 at the end of April to 22,900.

Rob Thomas, senior policy adviser for the CML says: "So long as properties have paying tenants, landlords now have much greater ability to service mortgage payments and we expect arrears to continue to fall as landlords are helped by lower interest rates. But healthy rental demand is contingent on a number of factors, including tenants' continued employment."

Keshav Thukaram, managing director of Smartlandlord.co.uk, says these hopeful buy-to-let arrears figures show that the market has bottomed out and is starting to recover – albeit slowly.

And the National Landlords Association says: "This reflects how much landlords are benefiting from lower interest rates. This can only be good news for tenants – however, for buy-to-let landlords the worst may not be behind them. Rent arrears, owing to job losses and financial difficulties, remains a serious concern for many and this is set to continue."

SOURCE: CML, NLA, Smartlandlord, 14/08/09

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