The number of buy-to-let (BTL) properties in arrears showed a marginal increase of just over 0.5% compared with the previous quarter, to 13,570.

The overall proportion of mortgages in arrears remains low, at 1.10% of homeowner mortgages and 0.69% of BTL mortgages.

Homeowner and BTL properties in early arrears fell by 3% and 6% respectively.

UK Finance says this means that fewer customers are falling into early arrears and suggests there could be a limited increase in arrears cases in the next quarter.

However, the decrease also partly reflects some customers previously in early arrears moving into more serious arrears shortfalls.

While the percentage of mortgaged properties taken into possession has risen, this is largely due to the HM Courts Service increasing capacity to work through historic arrears cases.

Possession numbers remain very low compared to historic figures with a total of 1,690 homeowner and BTL mortgaged properties were possessed in Q2 this year.

This is 15% lower than the 1,980 seen in Q4 2019, before the pandemic, and 87% lower than the 13,200 seen in Q1 2009.

UK Finance director of mortgages Charles Roe says: “The number of mortgages in arrears has remained broadly flat compared to the previous quarter, which is good news following recent increases. This reflects the fact that while many households remain under pressure, the challenges of higher rates and the cost of living have begun to ease.”

Meanwhile, Phoebus chief sales and marketing officer Richard Pike says: “A 13% increase in possessions of BTLs in the second quarter of 2024 might come as a blow to some. However, we can probably attribute a portion of this to the fallout from the previous high energy and general costs of living that have taken their toll on renters and landlords alike.”

“Now that inflation and energy prices have dropped, and the market is so much more buoyant as we move through the second half of 2024, I would hope that the equivalent figures this time next year will look a lot more promising.”

“The 8% increase on possessions of homeowner properties can be similarly explained. Gladly, Consumer Duty rules will have helped a lot of homeowners avoid falling into this group, as the handful of lenders who might not have been so understanding during times of financial hardship, are now obligated to help their borrowers as much as possible.”

Target Group growth and sales lead Mel Spencer adds: “The rise in the number of possessions has continued an upward trajectory all year, with both homeowner and buy-to-let possessions on the rise. The biggest surprise may be the number of buy-to-let possessions up a whopping 51% year-on-year.”

“The pressures on landlords and tenants have been increasing exponentially with rising mortgage rates and increasing tax pressures forcing many landlords to relay the costs down to tenants in increased rents.  Today’s figures demonstrate that, for some, those pressures have just become far too much, but it is alarming as it will further decrease the supply of rental housing,”

“A 31% year-on-year increase in homeowner possessions, while still significant, looks modest in comparison with the buy-to-let percentages, although the real numbers are higher with almost 1000 people having lost their homes.”

“The one positive is that while the number of arrears, compared to last year, are still up 51% for buy-to-let and 17% for homeowners, they have levelled off this quarter, hopefully reflecting the top of the curve and the start of a downward trend as inflationary pressures recede.”

Earlier this morning, the Ministry of Justice announced the latest mortgage and landlord possession figures.

The data showed that mortgage possession claims went up by 34% from 3,991 to 5,343 while landlord possession claims increased by 9% from 22,526 to 24,495.