UK Finance, the trade association for the UK banking and financial services sector, claims that in Q3 there were 11,540 buy to let mortgages in payment arrears which is 0.57 per cent of all BTL mortgages in England and Wales.

Image credit: iStock

The company attributed the increase in BTL mortgage arrears was due to higher interest rates and the continual cost of living  pressures which many landlords are unable to pass onto tenants.

During July to September 450 private sector landlord repossessions were awarded which was11% higher than the same time last year.

A spokesperson for a PRS trade association, told the BBC: “It’s a miserable situation for landlords who are losing money, renters who are paying extortionate rents, banks who are finding their loans are in arrears and HMRC isn’t even increasing its income due to the number of landlords leaving the market.

Another trade body says: “With the demand for rented housing massively outstripping supply, we need a healthy and vibrant private rented sector.

“Today’s figures from UK Finance are therefore extremely worrying.

“The Chancellor needs to undo the damage done by tax hikes on the sector and reinstate mortgage interest relief in full for the private rented sector.”

Of course homeowners are also having to contend with the same financial pressures and difficulties in staying on top of their mortgage payments with 87,930 homeowner mortgages in arrears during Q3 which rose by 7 per cent from the previous three months.

This is 1 per cent of all outstanding homeowners’ mortgages, which is so much lower than the highest number of mortgage arrears during July to September 2009 of 207,000 in the financial crisis peak. 

UK Finance says although mortgage arrears are on the rise it is kept lower because of lenders’ stress tests that helps ensure borrowers will be able to keep up with mortgage payments in the case of interest rates’ increases.

Eric Leenders the managing director of personal finance at UK Finance, said: “Anyone worried about making their mortgage payments should contact their bank as soon as they can.

“All lenders have teams of experts ready to help anyone struggling with their mortgage payments with tailored support.

A leading financial product solutions software company, said: “The rate at which arrears is increasing is the worrying statistic that is unlikely to fall in any time soon.

“As worrying as this increase may be to many, the number of possessions fell.  This shows the increased forbearance that lenders are showing to struggling borrowers.

“When you consider that lenders had to stress test borrowers up to 8% for almost all of the mortgages in existence today, the question is why is this happening?