Helping a Client Recover from Mortgage Arrears on a Buy-to-Let Property

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The challenges of the current BTL market can place landlords and brokers under immense pressure. Our ongoing inflation issues can lead to long-term ramifications for borrowers.

Say a landlord loses their existing tenants as they move to a more affordable part of the UK. Months may go by without the owner securing replacement tenants. As a result, they’re likely to fall behind on their mortgage, which could impact their credit score, and put them at risk of repossession.

In an effort to prevent this, they may have taken out finance to refurbish the home, and make it more appealing to tenants who would be able to cover the higher rents. The same funding could have also been used to cover the mortgage payments over the short-term.

Now though, they needed a longer-term exit plan. This is where our BTL mortgage product could help.

Creating breathing space

We could utilise our BTL terms of up to 10 years to provide breathing space for the borrower. The opening years of the loan could be fixed, which would offer short-term stability, and allow them to focus on securing tenants. Moreover, we could roll interest to ease their immediate cash flow issues.

With this added time and capacity, the borrower would be able to improve their financial position, and allow them to hopefully secure better options for their exit strategy. We’d likely work with the broker involved to put a contingency in place that if the borrower still couldn’t secure tenants within a certain timeframe, they’d need to put the property on the market for sale.

With an improved financial position, alongside a (hopefully) increased value following the refurbishment, the borrower should have few issues in progressing.

FAQs

Q: Can I still get a loan if I’ve missed payments in the past?

Yes, you can. We take a holistic view of your financial history. In one case a borrower had multiple missed payments and even a CCJ, yet we saw these were isolated events. With a clean current record and a well‑structured exit strategy, we supported their commercial investment. We believe a few setbacks shouldn’t derail credible plans so long as there’s clear evidence of recovery.

Q: Do you offer solutions to help rebuild credit after defaults?

We do. Through our bridging refinances, borrowers who’ve had missed payments can re‑establish their credit standing. Once they’ve shown clean payment behaviour for a year, they’re often in a much stronger position to move on to longer‑term finance.

Q: What makes your approach different for clients with adverse credit?

Our underwriting relies on individual assessment of each case, not tick‑box rules. A borrower with past financial hiccups can still acquire a loan for a renovation or property purchase. We can adapt the loan structure to the client’s situation, focussing on the merits of the project and their current financial health rather than penalising them for past errors.

Q: Are missed payments becoming more common among property investors?

Unfortunately, yes. As arrears rise across the sector, many investors are finding their plans interrupted by credit issues. We recognise that adverse credit, including defaults, CCJs, or IVAs, is increasingly widespread, and our specialist financing exists precisely to help investors overcome these obstacles.