Thursday, March 19, 2009

Big increase in BTL mortgage arrears

The recession has just opened a can of whupass on BTL speculators. Arrears are up, and those property empires are looking vulnerable.


  1. It's whupass Alice, but I know what you mean. Like your foray into the lingo of the 'hood.

  2. Anon 14:28

    Thanks for the spelling correction. I will repost.


  3. Oddly enough I've just been doing some research myself on ordinary mortgage arrears at the Council for Mortgage Lenders website and it explains that using the three months or more figure is not terribly accurate when interest rates have changed so significantly since the tsart date you are comparing with.

    I'll quote:

    "2. On arrears, the effect of "percentage of balance" versus "number of months" as a measure is best illustrated by an example:

    A borrower with a £100,000 interest-only mortgage a year ago might have been paying a rate of around 7.5% at the beginning of 2008, making their contractual monthly payment £625. But by the end of 2008, the same borrower might have seen their rate fall to 4.5%, with their contractual payment only £375. If this borrower fell £1,500 behind on their mortgage, at the beginning of 2008 this would have been equalto 2.4 months arrears. But by the end of 2008, £1,500 would equate to 4 months arrears. However, using the “percentage of balance” figure, the borrower would be 1.5% in arrears in either period. "