Cases of buy-to-let arrears rose by 28% in the second quarter of 2023, totalling 8,980 cases, UK Finance figures show.
Some 440 buy-to-let mortgaged properties were taken into possession in the second quarter of 2023, 7% more than in the previous quarter.
Adam Oldfield, chief revenue officer at Phoebus Software, said: “The level of arrears and possessions in the buy-to-let sphere is worrying.
“The rising costs of rents in the private sector is well reported, so it has to be a concern to lenders that the number of landlords in arrears has increased by such a high percentage.
“Landlords will no doubt come under the microscope again, so perhaps Michael Gove’s call for the EPC regulations to be delayed is a better idea than at first received.
“We all know how vital the rental sector is, especially when there are so many barriers to get onto the property ladder, so lenders will need to be talking to their landlord clients before the situation gets any worse.”
Across the entire market there were 81,900 homeowner mortgages in arrears of 2.5% or more of the outstanding balance in Q2 2023, 7% more than the previous quarter.
A UK Finance spokesperson said: “The number of mortgage holders in arrears rose in Q2 as higher mortgage rates and the cost of living continued to weigh on households.
“Although any rise in arrears can be worrying, overall numbers remain low with less than one per cent of homeowners and less than half a per cent of landlords behind on their payments.
“Lenders have been preparing for any continuing increases in arrears, for example with the launch of the Mortgage Charter, and have already helped over 200,000 borrowers before they have got into financial difficulty by restructuring their repayments.
“The number of homeowner and buy-to-let possessions in Q2 remain close to historic lows but are expected to continue to rise in line with our mortgage market forecast given the ongoing cost of living challenges.
“It’s important for homeowners and landlords to remember that there is support available to anyone struggling with their finances. If you think you might have difficulty making your mortgage payments, reach out to your lender early to find out the options available.”