The Association of Residential Letting Agents and the Council of Mortgage Lenders have rebutted press claims that buy-to-lets make up a large slice of mortgage repossessions.
Last week the Financial Times reported that while buy-to-let mortgages account for less than 10% of the market, auctioneers claimed that half of all repossessions handled by them were buy-to-let properties.
The article stated that the reasons for this were rising interest rates and the overdevelopment of new flats in some areas, leaving growing numbers of property investors unable to meet interest repayments.
But the CML says this is misleading and is writing a letter to the FT explaining its position on the matter. It says it has found that less than 10% of repossessions relate to buy-to-let.
ARLA backs this and says the report is “irresponsibly” wide of the mark.
John Heron, chairman of ARLA’s buy-to-let panel, says: “We are disappointed that such stories are being published on the back of anecdotal information.”
ARLA says that industry data confirms that buy-to-let mortgages have lower arrears than mortgages generally as well as fewer repossessions.
But Gary Murphy, a consultant at auctioneers Allsop, who is quoted in the FT article, estimates that half of the repossessions it handles are buy-to-lets: “[Such] investments have become trendy but amateur investors haven’t given it enough thought.”
A spokesman for BM Solutions says: “The credit quality of buy-to-let continues to outperform expectations.”