Collective figures for quarter four 2010 show that only 2.03% of all CHL’s buy-to-let mortgage accounts were over three months in arrears. This compares with industry figures released this month by the Council of Mortgage Lenders (CML) which show a comparable figure of 2.62% - a difference of 59 basis points (bps).
In every quarter of 2010 CHL’s arrear levels outperformed the industry average by over 50 bps.
For the CML’s preferred measurement - looking at arrears over 1.5% of the outstanding balance - an even stronger picture emerges with figures for CHL of only 0.31% compared to the CML industry figure of 1.51%; a significant differential of 120 bps.
As at the end of December 2010 CHL’s gross arrears levels are now 42% down since their peak back in February 2009, exceeding expectations for the past year. The specialist lender fully expects the downward trend to continue throughout 2011.
There has also been a continuation in the overall improvement in accounts where a receiver of rent has been appointed. These properties are now achieving, on average, 155% rental cover and of the total number of properties available to let, 92% are let at this time. This has improved from a figure of 36% 18 months ago.
The receiver of rent manages the property on behalf of the borrower. CHL works with two such companies, Alder King and Touchstone, who collect the rental income from properties where the mortgage is in arrears - the money is then paid direct to CHL.
Commenting, Bob Young, managing director at CHL Mortgages, said: “I am frankly blown away by the results the team at CHL have achieved. As our figures show, we are consistently outperforming the wider buy-to-let sector by a significant margin.
“CHL’s focus is on driving down arrears levels by working with our borrowers and we fully anticipate that our hard work in this area will produce further improvements throughout 2011. Outperforming the industry is one thing; however we should also remember that CHL’s figures are based on a static mortgage book meaning there is no new lending to make our arrears level look even better.
“The relationship with our receivers of rents has been central to our success; they have to make sure the borrower’s position is fully protected regardless of what is in the best interest of CHL. By choosing to work with two of the best companies in the UK we have outperformed our expectations and as a result have a significant number of improving accounts where a receiver of rent has been appointed.
“The strategy is working and we intend to keep this focus with stakeholders to ensure the best outcome for all and to maintain the downward momentum we have achieved over the last two years.”