The latest CML data shows 1.1% of all buy-to-let mortgages outstanding are now in arrears of three months or more. This compares with a figure of 1.33% in arrears for the total mortgage market.
Bob Young, Managing Director of CHL Mortgages, commented: “At a time when the buy-to-let sector is under intense scrutiny because of the nationalisation of Bradford & Bingley, these figures at least show that buy-to-let arrears are still below those of the wider mortgage market. In response to the current criticism of buy-to-let the point should be made that the sector is still sound and if lenders had not pushed themselves up the risk curve to a precarious height, we would not be witnessing the problems we currently are. Buy-to-let lending to genuine landlords (rather than short-term speculators) is not a risky business – unfortunately many lenders chose to ignore this in their scramble for volume and their lending practices have come back to hurt them.
“Looking at these latest statistics I am pleased to say that CHL Mortgages’ own buy-to-let book continues to be cleaner than the CML’s buy-to-let and home loan figures. For this data, which is for the period up until the end of June 2008, the percentage of those in arrears of three months or more with CHL is 0.3%. Both CHL’s and the CML’s figures also exclude receiver of rents and repossessions; if we were to take these into account as well the CML figure would rise to 1.4% and CHL up to 0.77%.
“Since our temporary withdrawal from new lending earlier in the year, CHL has been focused on ensuring the quality of our buy-to-let book remains high. This is an ongoing process and it is marked by active arrears management and a commitment to helping those customers who may be experiencing payment difficulties. We will continue to offer this service and are also putting in place updated systems to ensure CHL’s new lending is of the highest quality when we return to market in the near future.”