An estimated 10,000 buy-to-let landlords are more than three months behind with their mortgage, according to research from independent financial adviser Hargreaves Lansdown. More may follow as large numbers of landlords are due to come off cheap fixed-rate mortgage deals in 2009 and 2010.

The boom in buy-to-let in the past decade will not affect the professional investors as they have started long ago so their loans are likely to be low. However, new landlords in this market make up a large proportion of property buyers. This group were able to take advantage of cheap deals from lenders in 2006 and 2007.

But since the onset of the credit crunch, mortgage rates – particularly on buy-to-let deals – have been rising. In addition, many landlords who have bought in recent years may now be in negative equity as average house prices have slipped by around 10 per cent since their peak last summer and are widely predicted to fall further over the coming months. As a result, landlords could be left with a depreciating asset in future and higher repayments on the loan used to buy the asset.