英国抵押贷款利率上调影响分析报告-培训课件外文版2024.6

INDUSTRIES

&

MARKETSImpact

of

the

mortgage

interestrate

hikes

in

the

UKSpotlightreportWhat

is

the

impact

of

the

mortgage

interest

rate

hikes

in

the

UK?KeyquestionsansweredinthisreportWhat

is

the

impact

on

first-timebuyers?What

is

the

impact

on

homebuyerswith

a

mortgage

up

for

renewal?What

is

the

impact

on

privatelandlords?•

Theaverageeffectiveinterestratefornewmortgagesequaled5.09percent

inJanuary2024,

anincreaseof3.5percentagepointsfromJanuary2022.•

Aboutfive

million

households

areexpectedtosufferanincreaseinmortgagepaymentsby2026.•

About28

percentofbuy-to-letlandlordswillhavetorenewamortgagedealin2024,

resultinginhighercosts.•

Homebuyersweremostlikelytofallbehindonstore

or

creditcardpayments.•

Landlordswithlowyieldandhighloan-to-valueratioontheirpropertyaremost

vulnerabletomortgageinterestrateincreases.•

Closeto90

percentofprospectivebuyersarestillcommittedtobuyingahouse.•

Thenumberofmortgagearrearsrose25

percentyear-on-yearinthe4thquarterof2023.•

Theaveragemortgagepaymentexceeded40

percentof

take-homepay

formostoccupations.•

Limited

companies

aregrowinginpopularitybecauseoftheabilitytooffsetinterestratesandotherfees.2What

is

theimpactonfirst-time

buyers?1Borrowing

costs

have

increased

substantially

in

the

past

two

yearsEffectiveinterestrateonnewmortgageadvancesintheUKfrom2021to2023Interestrates

have

rocketed

since

early

2022FewmattershavecausedmoreuneaseintheUKhousingmarketthanthemortgageinterestratehikesthatbeganin2021.Thehikeswerearesponsetoinflationthatstartedtoincreaseinthefirsthalfof2021andhit11percentinOctober2022.Totameinflation,theBankofEnglandincreasedthebanklendingrate,causingtheaveragefixedinterestratefornewmortgagestosoar.InJanuary2024,

theaverageinterestratefornewmortgageadvancesamountedto5.09percent,whichwasanincreaseof3.5percentagepoints(pp)fromJanuary2022.Althoughinflationcalmedandmortgageinterestratesdecreasedslightlyfromtheirrecentpeak,first-timebuyersstillfacesubstantiallyhighercosts.FIXED

RATEFLOATING

RATE5.75%+4.2pp4.26%+3.5pp3.82%5.09%Ahomebuyerwhoboughtahousefor290,000Britishpoundswitha25percentdeposit,fixedinterestrate,andaninitialtermof25yearsinJanuary2022wouldhaveamonthlyrepaymentof878Britishpounds,resultingin46,000Britishpoundsininterestpayments.In2024,

ahousewiththesamepricewouldhaveamonthlypaymentof1,283Britishpoundsoratotalinterestof167,374Britishpounds.1.58%1.53%Thecost-of-livingcrisisandtheuncertaintyaboutthedevelopmentofinterestratesandhousepriceshavefurtheraffectedbuyersentiment.Asurveyconductedamong2,000adultsintheUKinDecember2023foundthatonly16percentofrespondentsreportedthatthetimewasrightforahousepurchasecomparedto41percentwhodisagreed.2022202320243Notes:UK;2022to2024;monthlyaveragerates;Januaryof

each

year;lendingtoindividualsand

individualtrustsSources:

BankofEngland;ID:

1455523;Text:OfficeforNationalStatistics;ID:306648;BuildingSocietiesAssociation;ID:1175172What

is

theimpactonfirst-time

buyers?1UK

adults

have

notgiven

upon

homeownershipHomeownershipplansofUKadultsin2023The

majority

of

prospective

buyers

want

in

as

soon

as

possibleIn2023,

closeto90percentofUKadultsunder35whohadnotboughtahouseyetwerestillcommittedtobuying,accordingtoasurveyconductedbyHalifax,amortgagelender.Nevertheless,therisingcostsofbecomingahomeownerhaveaffectedprospectivehomebuyers'plans.Oneinfourrespondentssharedthattheyhaddeprioritizedpurchasingaproperty,while22percenthadplacedplansonhold.Additionally,buyersneedmoretime,research,andfinancialhelp.Onewaytodecreasecostsoverthemortgagetermistomakeahigherdownpaymentandthusreducetheprincipal.Thisisnotaneasydecision,consideringthatthedeposit,usuallyabout20percentofthehouseprice,isthemostsubstantialupfrontcosthomebuyersface.ADecember2023surveybytheBuildingSocietiesAssociationfoundthatraisingenoughmoneyforadepositwasthesecond-biggestbarriertoShareofrespondents87%Stillcommittedtobuyingaproperty33%25%WanttogetonthepropertyladderassoonaspossibleDeprioritizedordelayedbuyingtofocusonotherpriorities22%Planstobuyarecurrentlyonhold19%Moreresearchtomakesuretheyarecertainoftheirchoice18%Needmoremonetarysupportfrombanks,family,

andfriendshomeownershipaftertheaffordabilityofmonthlypayments.AsurveybyAldermore,amortgagelender,

foundthatin2023,

about23percentoffirst-timebuyerswhoappliedforaloanreceivedarejection.Theleadingreasonfortherejectionwasaninsufficientdeposit.Thesamesurveyfoundthatmorethanhalfofprospectivebuyerssoughttoraisealargerdeposit,while49percentsharedthatthehigherrateshaveaffectedtheamountbuyerswerewillingtospend.4Notes:UK;2023;3,000individualsundertheageof35whohaveyettopurchasetheirfirstpropertySources:

Halifax;ID:1250911;Text:BuildingsSocietiesAssociation;ID:1175185;Aldemore;Opinium;ID:1452156What

is

theimpactonfirst-time

buyers?1How

have

first-time

buyermortgages

changed?Theaverageloansizein2023was234,722Britishpounds,downbytwopercentfrom2022but27percenthigherthanin2019.Thechangewasbecauseofthestronggrowthinhousepricessince2019andthecorrectionin2023.Theaveragefirst-timebuyerhousepriceamountedto288,136Britishpoundsin2023,

downbyfivepercentfrom2022but24percentmoreexpensivethanin2019.House

prices

declined

slightlyin

2023Theaveragedepositsizeamountedto53,414Britishpoundsin2023,

downby15percentfromthepreviousyearbut16percenthigherthanin2019.Anincreasingshareofbuyersrelyonfinancialhelpfromfamilyorfriends–35percentin2023comparedto27percentthepreviousyear.Nevertheless,theleadingsourceofdownpaymentcontinuestobesavings,accordingto87percentofhomebuyers.Theshareofcashpurchasesdoubledin2023,

fromfiveto10percent.Additionally,theshareofbuyerswhoputdown20to29percentasadepositincreasedfrom15percentin2022to24percentin2023.Thesechangeswereattheexpenseofloanswithnodownpaymentor30to99percentdownpayment.Homebuyers

need

more

helpwith

raising

a

depositTheshareofborrowerswitha20to29-yearmortgage,whentakenout,increasedfrom38in2022to44percentin2023.Thatwasattheexpenseoftheshareofborrowerswith30ormoreyears,whichwasthepredominantgroup,andtheone-to-nineyearsgroup.The

ones

whocould

afford

itchosea

shorter

mortgage

term5Sources:

LloydsBankingGroup;ID:792294;LloydsBankingGroup;ID557882;HMRevenueand

Customs;LloydsBankingGroup;UK

Finance;ID557891;DepartmentforCommunitiesand

Local

Government;ID:1455566;DepartmentforCommunitiesand

LocalGovernment;ID:1455579;DepartmentforCommunitiesand

LocalGovernment(UK);ID:

1455576What

is

theimpactonfirst-time

buyers?1Housing

affordability

has

improved

slightly

in

the

past

yearThe

house

price

index

fell

notably

in

2023The

southern

regions

were

the

least

affordableSalarygrowthintheUKhasbeenstrongbutnotenoughtokeepupwiththesoaringhouseprices.Atitspeakinthethirdquarterof2022,

thehousepricetoincomeratioreached121.7indexpoints,suggestingthathousepricesoutgrewincomesbyalmost22percentsince2015,

thebaselineyearfortheindex.Theindexhassincedeclinedbecauseofacorrectioninhouseprices.Nevertheless,thechangeinpriceisoffsetbythehighercostofborrowing.Housepricetoincomeratio(2015=100)Ratiooffirst-timebuyerpricetomeangrossearningsinQ4202313012011010090LondonLondon

Metropolitan*So

uth

West8,46,66,16,05,2121,7Outer

South

EastEast

ofEnglandUK113,75,24,84,8Affordabilitywasnotablyworseinthesouthernregionsofthecountry.InLondon,thehousepricetogrossearningsratioforfirst-timebuyerswas8.4,significantlyhigherthanthenationalaverageof5.2.InScotland,theratioamountedto3.2,

meaningthatbecomingahomeownerwastwicemoreaffordablethanintheOuterMetropolitanareaofLondon.West

MidlandsEast

MidlandsWales4,3Northern

IrelandNorth

West4,24,03,7Yorkshire

and

the

HumberNorth3,33,2Scotland6Notes:(1)UK;Q12015toQ32023;(2)UK;Q42023;thefigureshavebeen

calculated

astheratioof

Nationwidefirst-timebuyerhousepricestothemean

grossearningsin

each

region;earningsdatareferstofull-timeworkerson

adultrates;*OuterMetropolitan

areaof

LondonSources:

(1)DepartmentforCommunitiesand

Local

Government;OECD;ID:591728;

(2)NationwideBuildingSociety;OfficeforNationalStatistics;ID:1250372What

is

theimpactonfirst-time

buyers?1Mortgage

payments

exceed

40

percent

of

take-home

pay

for

mostoccupationsFirst-timebuyermortgagepaymentasapercentageoftake-homepayintheUK,byoccupationAffordability

worsened

the

most

for

sales

and

customer

service

employeesChange

inpercentage

points(2019

to2023)Housingaffordabilitydoesnotonlyconcernlower-incomeearnersandemployeeswithlowqualifications.Theoccupationalgroupofmanagers,directors,andseniorofficialswastheonlyonewithanaveragemortgagepaymentbelow30percentoftotalearningsin2023.ForpeoplewithelementaryMortgagepaymentasashareoftake-homepaySal

es

and

customer

serviceCarin

g,

leisure,and

oth

er

serviceElementary

occupations55%55%55%+14pp+13pp+12pp+14pp+11pp+12pp+13pp+10pp+10pp+8ppoccupations,salesandcustomerservice,caring,leisure,

andotherservices,mortgagepaymentsexceeded50percentoftake-homepay.Althoughaffordabilityworsenedacrossalloccupationgroups,thechangewasmostnotableforthehardest-hitoccupations.Administrative

and

secretarial50%45%45%40%38%33%28%Process,plant,and

machine

opsSk

illed

trade

occupationsAssociate

professional

&

tech

nical

occupationsAll

occupationsProfessional

occupationsManagers,directors,

an

d

senior

officials7Notes:UK;2023;thefiguresarecalculated

usingthetypicalfirst-timebuyerpriceand

aloan

amountingto80percentoftheprice,structured

over25years;take-homepayreferstothemean

earningsforafull-timeworkeron

adultratesand

thetax

and

nationalinsurancerates.Sources:

NationwideBuildingSociety;OfficeforNationalStatistics;UK

Finance;ID:1250447Impactonhomebuyerswithamortgageup

for

renewal2Five

million

householdsface

an

increase

in

mortgage

payments

by

2026Numberoffixed-ratemortgagesupforrenewalby2026,

asofDecember2023Five

million

households

toface

an

increase

in

mortgage

paymentsIntheUK,theperiodforwhichborrowerslockinterestratesisrelativelyshort–fromtwoto10years.Afterthedealends,theborrowerrenewsthemortgage.Often,thatisanopportunityforhomebuyerstoaccessabetterdeal.However,becauseoftherecentinterestratehikes,approximately55percentofmortgageaccountssufferedanincreaseintheinterestratebetweenlate2021and2023.Numberofloansin1,000s,

bycostincrease1

to

99

GBP100

to

199

GBP200

to

299

GBP300

to

399

GBP400

to

499

GBP500

to

749

GBP750

to

999

GBPMore

than

1,000

GBP372482429314220595564Thehikewillfurtheraffectaboutfivemillionhouseholdsbytheendof2026.Onaverage,themonthlypaymentfortheseloansisprojectedtoincreaseby240Britishpoundsor39percent.Approximately29percentofhomeownerswithamortgagehadnosavingsin2023.Thesehouseholdsmaystrugglewithhighermortgagepaymentsormeetingotherunexpectedcosts.Otherimpactsincludetheneedtocutspending,reducesavings,orevendipintotheirpensions.409270175Theeffectsstretchbeyondthat.MartinLewis,

afinancialjournalistandbroadcaster,hasreferredtotheissueas“atickingtimebomb.”Overindebtedhouseholdswhofearlosingtheirhomebecausetheycannolongeraffordtheirmortgagepaymentssufferincreasedlevelsofstressandanxiety.Thesecanhavesevereconsequencesforhealthandqualityoflife.289108

66118

81200202420268Notes:UK;December2023;owner-occupiermortgageswith

an

increaserelativeto2ndquarter2023;thesourceaddsthatincreasesin

paymentson

variable-ratemortgagesare

calculated

byusingtheimplied

upliftin

theOIScurve.Thepaymentsincreaseforfixed-ratemortgagesiscalculated

byassumingatypicalfixed

rateatthetimeofremortgaging;thefiguresexcludemortgageswith

lessthan

1,000British

poundsin

balancesoutstandingSources:

BankofEngland;ID:1399938;Text:DepartmentforCommunitiesand

LocalGovernment;TheGuardianImpactonhomebuyerswithamortgageup

for

renewal2Therising

cost

of

living

has

affected

the

ability

to

meet

financial

commitmentsShareofmortgageborrowerswhohavemissedorfallenbehindonafinancialcommitmentin2022Homebuyers

were

most

likelytofall

behind

on

store

or

creditcard

paymentsHouseholdsfacingfinancialdifficultiesareatriskofdelayingormissingcreditpaymentsorbills.Accordingtoanationallyrepresentativesurveyconductedin2022,

theimpactwasmostsignificantforcreditorstorecarddebtrepayments.Thatwasthecaseforabout56percentofmortgageShareofrespondentsCreditor

storecard56%borrowerswithmissedordelayedpaymentsduringthesixmonthsbeforethesurvey.Oneinthreerespondentshadmissedordelayedpayingtheirutilitybill,

while18percenthadmissedordelayedtheirmonthlymortgagepayment.Otherhouseholdbills1%Utilitybills32%23%Don’tknowOther4%Strugglinghouseholdscanaccesspaymentdeferralsoraskfortailoredsupport.Thatwasthecaseforaboutfivepercentofhomeownerswithamortgage.Accordingtothesource,overindebtedhouseholdswerefourtimesmorelikelytohaveaskedforpaymentsupportinthepasttwoyearsthanthosenotoverindebted.7%CounciltaxpaymentsOthercreditcommitments16%18%Mortgagerepayments9Notes:UK;February1

toJune6,2022;250adultswith

amortgagewhohavefallen

behindormissed

anypaymentsforcreditcommitmentsordomesticbillsin

thelastsixmonthsSources:

FinancialConductAuthority;ID:1454695;Text:FinancialConductAuthorityImpactonhomebuyerswithamortgageup

for

renewal2Mortgage

terms

have

gotten

longerShareofnewmortgagedebtfrom2015to2023,

bytermlengthThe

share

of

mortgages

over

35

years

increased

byfive

percentage

points

in

2023Mortgageholderscanmakechangestothetermsandconditionsofthemortgageloan,butthatcomeswithaprice.Forexample,homebuyerscanapplyforamortgageholiday,extendthetermoftheloan,ortemporarilyswitchtoaninterest-onlymortgage.Thatreducesorstopsmonthlyrepaymentsbutalsohasdownsides.Theborrowermusteventuallycatchupwiththedeferredprincipalandinterestratepayments.Inmostcases,atermextensionleadstothecompoundingofinterestandahighercostpaidinthelongrun.Shareofmortgages3530252030

to

35

years25

to

30

yearsLess

than

20

years20

to

25

yearsMortgagetermshavegenerallygottenlongersince2015,15+5

ppMorethan

35

years

whenthemostpopularloantermwasunder20years,with105about31percentofloans.In2023,

thehighestshareofloans,28percentofnewlending,was30to35years.Additionally,mortgageswithatermofover35yearsgrewfrom1.8percentin2015to7.3percentin2022,

followedbyarapidincreaseto12.5percentin2023.ThistrendmeansthatpeopleintheUK0201520162017201820192020202120222023willbeindebtedforlongerandlaterinlife,

affectingmajorlifeplanssuchasretirement.10

Notes:UK;2015to2023;firsttimebuyers,homemoversand

non-internalremortgages,thesourceexcludesproducttransfers,furtheradvances,mortgagesflagged

asabusinessloans,andlifetimemortgagesare

excludedSources:

BankofEngland;FinancialConductAuthority;ID:1455633Impactonhomebuyerswithamortgageup

for

renewal2An

increasing

number

of

borrowers

are

struggling

to

make

paymentsThe

number

of

arrears

rose

by25

percenty-o-y

in

the

4th

quarter

of

2023Thenumberofmortgagesinarrearsstartedtoincreaseinthesecondhalfof2022asthecost-of-livingcrisisandtheeffectofthehighermortgageinterestratesunfolded.Injustayear,thenumberofarrearsrosefrom75,200to93,700asofthefourthquarterof2023.Thatincludesarrearsofover2.5percentofthemortgagebalance.Notallarrearsresultinpossessions.Mortgagedeferralsandforbearanceplansaimtohelpstrugglingborrowers.Numberofarrearsin1,000s93,7Q487,9Q382,684,082,480,479,681,975,775,074,475,276,6Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q22020

2021

2021

2021

2021

2022

2022

2022

2022

2023

2023

2023

2023InAugust2023,

theUK’slargestmortgagelenders,theFinancialConductAuthority,andtheChancelloroftheExchequeragreedonaMortgageCharterwithasetofmeasurestoassistborrowersworriedaboutrisinginterestrates.Thenextpageprovidesmoreinformationontherangeofsolutionsavailabletostrugglingmortgageholders.Possessions

were

down

byfive

percenty-o-y

in

the

4th

quarter

of

2023Numberofpossessions800700690600610630Q3570540Q4420Q3390Q4200Q1220Q2140Q4AfterthemoratoriumonpossessionsinresponsetoCOVID-19ended,possessionsstartedtorise,peakingat800inthefirstquarterof2023.Inthefourthquarteroftheyear,therewereapproximately540possessions–adecreaseoffivepercentyear-on-year.Q1Q2Q3Q4Q1Q22020

2021

2021

2021

2021

2022

2022

2022

2022

2023

2023

2023

202311

Notes:(1)UK;Q42021toQ42023;mortgagesin

arrearsof

2.5

percentormoreof

theoutstandingbalance;(2)UK;Q42020toQ42023Sources:

(1)UK

Finance;ID:1452514;(2)UK

Finance;ID:1452493;Text:GovernmentDigitalServiceImpactonhomebuyerswithamortgageup

for

renewal2What

measures

are

there

to

helphomebuyers?Homebuyersstrugglingwithmortgagepaymentscanreachouttotheirlenderanddiscusstheavailableoptions,suchastemporarilyreducingthemortgagepaymentorextendingthemortgageterm.Freedebtadvicecharitiescanprovideadviceonbettermoneymanagement,benefitsorentitlements,andhowtorepaydebtfaster.Advice

and

supportMortgage

CharterTheCharterincludesasetofmeasurestoassistborrowersworriedaboutrisinginterestrates,includingaccesstoadvice,timelyinformation,enhancedsupport,atemporaryoptiontoswitchtointerest-onlypayments,andprotectionfrompossessionforuptoayearafterthefirstmissedpayment.SMI

isaloanprogramtargetedatindividualsreceivingmeans-testedbenefitssuchasUniversalCreditandPensionCredit.SMI

loanshelpindividualscoverinterestexpenses,

withrepaymentoncethepropertyissoldortransferred.Supportfor

Mortgage

Interest(SMI)

schemeAperiodofprotectionfromcreditorstodebtorswithproblemdebt.Thisincludespausingenforcementactions,contactingcreditors,andfreezinginterestandchargesondebt.Breathing

space12Sources:

GovernmentDigitalService;MoneyHelper;UK

ParliamentWhat

is

theimpactonprivate3landlords?Rising

mortgage

payments

force

landlords

to

make

difficult

choicesInterestratehikesarealsoimpactinglandlordswithbuy-to-let(BTL)mortgagesbyincreasingtheircostsandreducingprofits.AlmosthalfofBTLlandlordshavealreadyfelttheeffectbecausetheyhavepropertiesonvariable-ratedealsorfixed-ratedealsthatexpiredbeforetheendof2023.Additionally,

24percentplantonegotiateanewdealin2024.Tofacetheextracostsormeettheconditionsofthenewdeal,about28percentoflandlordshavealreadyresortedtoraisingrents.Topreventrentfromrising,somelandlordsusednon-rentalincomefortheirpayments.Additionally,landlordscanceledplanstoexpandtheirportfolioorsoldpropertytomeettheirloanobligations.Aboutone

in

four

BTL

landlords

will

see

a

fixed-termdeal

expire

in

2024What

actions

are

landlords

taking?Shareoflandlordswithatleastonefixed-termdealexpiringShareofBTLlandlordsDon'tknowRenegotiated

wi

th

sam

e

companyRaised

rents

because

ofBTL

term

sCanceled

plan

s

to

purchase

a

propertyRenegotiated

wi

th

different

companySo

ld

a

property30%28%BTL

financeonvariablerateNofixedratedealexpiringbeforetheendof20242%18%24%22%28%15%14%24%2024Used

non-rental

incom

e

to

stop

rent

risingNone28%BeforeDecember202330%13

Notes:(1)UK;Q22023;1,100NRLA

members;(2)UK;Q22023;1,100NRLA

members;actionsundertaken

sinceJuly2022ID:1452498;(2)ResidentialLandlordsAssociation;ID:1452755Sources:

(1)ResidentialLandlordsAssociation;What

is

theimpactonprivate3landlords?Themortgage

hikes

affect

landlords

disproportionatelyDistributionofbuy-to-letlandlordsintheUKin2023,

byLTVandyieldLowyield

and

high

LTVlandlords

are

most

vulnerableBeforeinterestratesbegantorise,theaveragemortgagepaymentcostamountedto24percentofrentalincome.ByAugust2023,

thisfigurehadreached37percent.Thoughtherisingcostsare8%

LowyieldandhighLTVconcerning,theydonotaffectalllandlordsequally.Landlordswhohaveheldtheirpropertylongerarelesslikelytobeseverelyaffected.2%

HighyieldandhighLTVInanidealinvestmentscenario,thepropertybuyerbuildsupequityastheypayofftheloanwhilethepropertyrisesinvalueandtherentincreases.Thatmeansthattheyield,ortherentalincomeasashareofthepropertyprice,growsoverthecourseofaninvestment.Therefore,landlordswhohaveboughtpropertyrecentlywhilehousepriceswereattheirpeakaremostlikelytohaveinsufficientequityandlowyield.Theselandlordsarethemostvulnerabletomortgageinteresthikesandmostatriskofturninganegativeprofit.Abouteightpercentoflandlordsfellintothisgroup.Theseborrowershadagrossyieldofunderfivepercentin2023andaloan-to-value(LTV)ratioofover60percent.Conversely,high-yieldandlowloan-to-valuemortgageswereinthebestpositiontoweatherthestorm.25%

HighyieldandlowLT5%

LowyieldandlowLTV14

Notes:UK;2023;lowyield

referstogrossyield

underfivepercentwhilelowLTVreferstomortgagedebtbelow60percentSources:

Hamptons;Skipton

BuildingSociety;ID:1452758;Text:BankofEngland;Hamptons;UK

Finance;ID:1452461;HamptonsWhat

is

theimpactonprivate3landlords?Whatmortgage

products

are

landlords

going

for?The

interestrate

is

not

the

most

important

factor2-year

fixed

termdeemed

the

most

preferred

dealMortgageinterestratesareimportanttolandlords,butthereareevengreaterfactorstoconsiderwhenchoosingamortgagedeal.Inasurveyamongmortgageintermediariesconductedin2023,

theamountbuy-to-letlandlordscanborrowwasthemostcrucialfactor,accordingtoalmosthalfoftherespondents.Interestratesonlycamesecond,accordingto21percentofrespondents.ShareofmortgagebrokersShareoflandlordsplanningtoremortgageinthenextyearAmount

they

can

borrowLowest

interestrate47%WilltakeadvicefrombrokerFixed,

2

years21%9%Amid-range

rate

and

feecombination14%28%In2023,

two-yearfixed-ratemortgageswerethemostpopulardealtypeamongbuy-to-letlandlordsintheUKwhoplannedtoremortgageinthecomingyear.Asofthethirdquarteroftheyear,27percentoflandlordsplannedtoremortgageinthenext12months.Itneedstobenotedthataconsiderableshareoflandlordswerestillundecided.Lowest

fee9%Don’tknow30%Lenders

who

provideproducttransfer

s6%3%Fixed,3yearsFlexible

underwritingNo

early

redemption

chargesOther3%2%2%9%19%VariableFixed,5years15

Notes:(1)UK;2023;thesourcedoesnotspecifythenumberofrespondentsorthedateofthesurvey;(2)UK;Septemberand

October2023;785landlordsSources:

(1)BVA

BDRC;Paragon

Bank;ID:1452305;(2)BVA

BDRC;Paragon

Bank;ResidentialLandlordsAssociation;ID:1452310;Text:BVA

BDRC;Paragon

Bank;ResidentialLandlordsAssociationWhat

is

theimpactonprivate3landlords?Landlord

arrears

andpossessions

have

increasedThe

number

of

arrears

more

than

doubled

y-o-y

in

the

4th

quarter

of

2023Despitesoaringrentsandstrongdemandforrentalproperties,sentimentintheprivaterentalmarkethasdeteriorated.In2023,

landlordswerelessoptimisticaboutyields,

theirownlettingbusiness,capitalgains,thesector,andthefinancialmarket.Thenumberofbuy-to-letarrearsincreasedforthesixthconsecutivequarter,reaching13,600inthefourthquarterof2023.Thenumberofpossessionsalsoincreased,hitting500duringthesameperiod.Thistrendisnotonlyconcerningtolandlords,whorisklosingproperty,butalsototheirtenants.Numberofarrearsin1,000s13,611,59,0Q26,76,37,0Q16,25,96,0Q45,9Q15,8Q36,1Q45,6Q2Q4Q1Q2Q3Q3Q42020

2021

2021

2021

2021

2022

2022

2022

2022

2023

2023

2023

2023Addi