Steep Rise in Buy-to-Let Mortgages Going Into Arrears Sparks Concerns for Renters

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Summary:

  • Buy-to-let mortgages entering arrears witness a significant increase, raising concerns for renters and the overall housing market.
  • Rental costs are projected to rise in the coming months, further burdening tenants who already allocate a substantial portion of their earnings toward housing.
  • Insufficient housing supply amid escalating demand emphasizes the urgency of addressing the housing crisis and promoting affordable solutions.
  • The state of the housing market is compounded by decades of inadequate investment in social housing, leading to a deteriorating situation for renters and the homeless.
  • Government intervention, including freezing housing benefits and enacting the Renters Reform Bill, is necessary to alleviate immediate challenges faced by renters.


Property professionals at the Royal Chartered Institute of Surveys expect rents to rise again in the next three months, exacerbating the situation for renters.


Recent data reveals a concerning trend in the housing market as the number of buy-to-let mortgages going into arrears surges. Renters, already grappling with high housing costs, are likely to face even more challenges ahead. According to statistics for England, those with mortgages spend around 22% of their income on housing. However, renters are burdened with a larger chunk, about 33%, further straining their earnings.

These figures, though revealing, are based on data from the previous year and might not capture the latest extreme conditions in the rental and mortgage market. The growing demand for rentals is evident, but the lack of available housing for these individuals is a critical concern. The dwindling supply of new landlord instructions indicates a potential imbalance that could lead to increased rent prices.


The predicament of rising buy-to-let mortgage arrears and the resulting strain on renters highlights the pressing need for substantial changes in the housing system and greater investment in social housing to alleviate the crisis.

Location: London, UK

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