Buy to let mortgage arrears reach record low

Landlord Expert
By Landlord Expert November 14, 2012 11:27

Out of 42,000 live mortgage accounts 572 (1.36%) were in arrears of three months while those accounts one month in arrears dropped below 900 to 896 (2.13%) for the first time since mid-October 2008.

Over the month this meant a decrease of 121 in total accounts in arrears.

CHL’s arrears levels are now at a four-and-a-half-year low and are beating its own 2012 best estimates which it set at the start of the year.

Also in October CHL’s asset management function saw the highest monthly rent receipt for all those properties now managed by a receiver of rent, 95% of which now have tenant occupancy.

The majority of these loans, which were originally underwritten at rental income percentage levels of 125%, now stand at 165% rental income.

And a number of distressed properties recently sold at two auctions bettered their reserves by a considerable margin. An auction in the North saw the six properties average 168% of the reserve price while 12 properties in the South raised on average 128% of the reserve price.

Bob Young, managing director at CHL Mortgages, said CHL had beaten a number of its own benchmarks with the positive arrears levels.

He said: “Our mortgage book has reached a four-and-a-half-year low in terms of arrears which is very pleasing because we have consistently beaten the best case scenario forecasts we made at the start of the year. On our one-month arrear levels we have broken through the 1,000 and 900 barrier during the year and looking ahead we believe we may just reach the low 800s before the end of 2012.

“Indicators of the quality of the book are abundant. For example our ability to bring in the highest monthly rent receipt ever during October is a stand-out highlight. We have also benefited from a continually improved timescale when it comes to the turnaround of maintenance and lettings work.”

Young added: “The challenge now of course is not to rest on our laurels but to continually improve on our figures. We know there is still room for improvement and all members of the CHL management team and those who work across the business are committed to ensuring that our numbers continue to go in the right direction.”

Landlord Expert
By Landlord Expert November 14, 2012 11:27

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