It appears that buy to let mortgage rates are not the only thing that is increasing as the mortgage market continues to shift and change as buy to let property repossessions are also stretching towards a new record high.
Right now repossessions are at a record high, but the banks and building societies appear to be ignoring this fact according to a data analysis performed by the Council of Mortgage Lenders because it appears that they are lending more than ever. Therefore, as the amount of lending continues to increase it is only fitting that repossessions will increase.
Over the first six months of 2012 there were a total of 18,000 repossessions out of which about 19% of all repossessions came from the buy to let market. This is a sharp jump from the 10% that were reported during the first six months of 2009.
The good news for home owners that may be struggling with the increase in their mortgage rates is that home repossessions have actually been dropping steadily since 2009. With fewer home mortgages being approved, it is only fitting that there would be less repossessions occurring.
The repossession rate, based on how many repossessions occur versus how many mortgages exist, reached 0.24% at one point during the stretch of time under consideration which is the highest that it has ever peaked.
On the other side of the equation, the repossession rate for residential mortgages sat at 0.15% which is a sharp drop from its previous 0.22%. Of course, commercial mortgage repossessions are also down due to the fact that their rates have not fluctuated and there has not been a large amount of uptake in this market. Obviously, the foreclosures are indicative of how the mortgage market is being divided.
Savills researcher, Neal Hudson, stated that there are many factors that had an influence on the increase in buy to let repossessions including the fact that lenders showed less forbearance then they had in the past.
The continual increase in higher mortgage rates also likely contributed to the amount of landlords that were forced to let their properties slide until there was no other option but repossession. In addition, buy to let properties most likely have a higher chance of arrears due to the fact that tenants default and then landlords are not able to keep up with their payments.