Mortgage arrears in buy-to-let sector still increasing

The number of buy-to-let mortgage accounts in arrears is continuing to increase despite rising rents in Dublin and elsewhere.

The latest figures from the Central Bank, however, show the number of homeowners in arrears has fallen again.

Nonetheless, this improvement masked an increase in very long-term arrears, with the number of those behind in their repayments by two years or more continuing to rise.

The figures for the second quarter of this year indicate mortgage arrears linked to investment properties remains a key problem for the banks.

As of the end of June, there were 144,187 residential mortgage accounts for buy-to-let properties held in the Republic with a value of €29.2 billion.

Some 39,669 (27.5 per cent) of these accounts were in arrears, compared to 39,361 (27.2 per cent) at the end of the previous quarter.

Of this, 31,749, or 22 per cent, were in arrears of more than 90 days, reflecting an increase of 2.3 per cent over the quarter.

There was also a quarter-on-quarter increase of 9.4 per cent in buy-to-let accounts in arrears over 720 days during the period.

Banks have been criticised for failing to tackle the high number of defaulting buy-to-let landlords on their books.

On a positive note, the figures indicated a total of 126,005 accounts linked to principal dwellings, representing 16.5 per cent of the total, were in arrears at the end of the second quarter, a decline of 4.7 per cent on the previous quarter.

While the number of accounts in arrears of over 90 days continues to fall, those behind in their repayments by 720 days increased by 1,752 or 5 per cent during the quarter and now accounts for 4.9 per cent of total principal dwelling mortgage accounts.

A further breakdown of the figures show 101,973 principal dwelling mortgage accounts were classified as restructured at the end of June, reflecting a quarter-on-quarter increase of 10.3 per cent.

Of these restructured accounts, 81.2 per cent were deemed to be meeting the terms of their current restructure arrangement.

The bank said the largest increases in restructures were recorded in the categories of split mortgages and arrears capitalisations.