Irish Buy-to-Let Performance Report: Q1 2025

In this report, we summarise our observations of the buy-to-let (BTL) sector and discuss the key drivers of asset performance as well as our expectations for 2025.

Key Highlights
-- Arrears vary with origination vintage, with newer originations continuing to show low arrears.
-- Pressure builds on pre-global financial crisis BTL transactions.
-- Weaker credit profiles, a prevalence of floating rate collateral, and adverse selection lead to significant arrears in buy-to-let transactions.
-- Prepayment rates in BTL diverge from the prime and nonprime sectors.

Petter Wettestad, Vice President, European Structured Finance Ratings, said, "The macroeconomic conditions of the last few years have disrupted the Irish prime and nonprime mortgage markets (as discussed in our recent commentary: Irish Prime and Nonprime RMBS Performance Report: Q1 2025), and the BTL sector has also been affected. In addition to the high levels of inflation and interest rates that have plagued the wider market, landlords have suffered from an increasing regulatory burden, which together have resulted in rising arrears ratios in certain pockets of the BTL market".