The number of delinquencies on UK buy-to-let mortgages has fallen for the first time in two years as borrowers have taken advantage of low interest rates to pay back arrears.

A study by Standard & Poor’s of the £58bn of buy-to-let mortgages that have been securitised in the UK shows signs of stabilising rates of delinquencies – the failure to repay loans on time – in the second quarter, suggesting that more people are finding it easier to pay loans.

Average delinquencies for UK prime buy-to-let mortgages residential mortgage- backed securities fell from 6.2 per cent in the first quarter to 6.1 per cent – the first drop in two years.

Delinquencies for non-conforming mortgages fell from 18.6 per cent to 17.1 per cent over the same period.

Severe delinquencies continued to rise, however – average delinquencies of more than three months increased from 2.5 per cent to 2.9 per cent for prime buy-to-let transactions and from 8.7 per cent to 9.5 per cent for non-conforming transactions over the quarter.

Huge swathes of buy-to-let mortgages were securitised during the boom years of the housing market, a rising credit risk over the past two years owing to declining property prices, a contraction in mortgage credit and growing uncertainty over the wider economic environment.

Andrew South, analyst at Standard & Poor’s, said cuts in interest rates now seemed to be having some positive effect.

“The trend over the past couple of years has been for the rate of arrears to increase but now it is levelling off. We assume it is because lower interest rates have meant lower monthly payments, meaning that more people can pay down arrears.”

But he said it was still too early to say if this meant the worst was over.

Standard & Poor’s still has concerns on the market, estimating that the number of borrowers in negative equity would rise significantly even for comparatively small further falls in house prices.