Reports that buy-to-let repossessions are on rise are “irresponsibly” wide of the mark says the Association of Residential Letting Agents.
ARLA says that industry data not only confirms that buy-to-let mortgages have lower arrears than mortgages generally, but that there are also fewer buy-to-let repossessions too.
It says that its own research consistently indicates that buy-to-let investors are financially astute, risk averse and take the long term view.
Investors typically have other sources of income from their occupations, other
property and other investments. This means that arrears are relatively rare.
Those that do encounter problems are normally able to trade through, or in
extreme situations sell a property before arrears levels start to climb.
John Heron, Chairman of the ARLA buy-to-let panel, says: “We are very
disappointed that such stories about buy-to-let are being published on the
back of little more than anecdotal information.
The facts on buy to let paint a very different picture with arrears and repossessions much lower than for the mortgage market as a whole.”
Buy-to-let is a medium to long term investment and the ARLA Quarterly
Surveys of investor landlords and lettings agents continually show that
typical investors intend to stay in the market with the same buy-to-let
properties for between 15 and 20 years.
The ARLA Panel of buy-to-let mortgage lenders is responsible for well over
half of all Buy to Let lending. They are Birmingham Midshires, GMAC-RFC, Mortgage Express, NatWest, Paragon Mortgages and The Mortgage Business.
This Autumn an ARLA report to mark the tenth anniversary of the launch of
buy-to-let showed that it has become a major industry with property assets worth well in excess of 130bn. These have loans secured on them of some 50bn.
The evidence gathered for the 10th anniversary report does not suggest that
buy-to-let investors are financially stretched. Instead, it demonstrates
that they have substantial cushions of their own wealth, being owner
occupiers and are either in employment or have other sources of income.
Over a million households now live in buy-to-let properties. The ARLA
report shows that they enjoy a higher standard of property due to buy-to-let and more a competitive private rented sector.