13 November 2006

Weekend reports that claim Buy to Let repossessions are on the increase are irresponsibly wide of the mark, ARLA the Association of Residential Letting Agents said today.

In a statement issued this morning, the Association has pointed out that industry data not only confirms that buy to let mortgages have lower arrears than mortgages generally, but that there are also fewer buy to let repossessions too.

ARLA research has consistently indicated that buy to let investors are financially astute, risk averse and take the long term view. Investors typically have other sources of income from their occupations, other property and other investments. This means that arrears are relatively rare.

Those that do encounter problems are normally able to trade through, or in extreme situations sell a property before arrears levels start to climb. This results in exemplary credit standards that are significantly better than for the mortgage market overall.

John Heron, Chairman of the ARLA Buy to Let panel said, "We are very disappointed that such stories about buy to let are being published on the back of little more than anecdotal information. The facts on buy to let paint a very different picture with arrears and repossessions much lower than for the mortgage market as a whole."

Buy to Let is a medium to long term investment and the ARLA Quarterly Surveys of investor landlords and lettings agents continually show that typical investors intend to stay in the market with the same buy to let properties for between 15 and 20 years.

The ARLA Panel of Buy to Let Mortgage Lenders is responsible for well over half of all Buy to Let lending. They are Birmingham Midshires, GMAC Residential Funding, Mortgage Express, NatWest, Paragon Mortgages and The Mortgage Business.

This Autumn an ARLA report to mark the tenth anniversary of the launch of Buy to Let showed that Buy to Let has become a major industry with property assets worth well in excess of £130 Billion. These have loans secured on them of some £50 Billion.

The evidence gathered for the tenth anniversary report does not suggest that Buy to Let investors are financially stretched. Instead, it demonstrates that they have substantial cushions of their own wealth, being owner occupiers and are either in employment or have other sources of income.

Over a million households now live in Buy to Let properties. The ARLA report shows that they enjoy a higher standard of property due to Buy to Let and more a competitive Private Rented Sector.

Read the ARLA special Report:
The Revolution – 10 Years On by Prof. Michael Ball (904k)

The document is available as Adobe Acrobat documents. If you do not have Adobe Acrobat Reader, you can download a free copy at www.adobe.com

 

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