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Buy-to-let regulation blamed as landlord arrears increase

Buy-to-let mortgage arrears increased in the first quarter of 2019, prompting concerns that disgruntled tenants are stopping paying rent as a result of landlords giving them notice and exiting the sector.

The latest arrears and repossession data from UK Finance showed that while repossessions in the buy-to-let sector were down, there were 4,620 landlord mortgages in arrears of 2.5% or more of the outstanding balance in the first three months of 2019 – up 3% annually.

Within the total there were 1,200 buy-to-let mortgages with arrears representing 10% or more of the outstanding balance, up 12% on the previous year.

UK Finance has claimed this is not an increasing trend, but Mike Pilling, managing director of Spicerhaart Corporate Sales, warns that it could be a consequence of landlords leaving the buy-to-let sector amid tax and regulatory clampdowns.

He said: “As a result of recent regulatory changes, there are many private landlords looking to get out of the sector, and this rise could be down to the fact that some tenants who have been given notice are now not making their rent payments.”

The figures also show the level of home owner mortgage arrears fell 4%, but 1,380 properties were taken into possession in the first quarter of 2019, 10% higher than in the same quarter of the previous year.

UK Finance said this was due to a backlog of cases and is still well below the levels seen between 2009 and 2014.


Source: Property Industry Eye

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Over half of UK landlords feel optimistic about current Buy to Let environment

Recent research from Your Move, one of the UK’s largest estate and letting agency networks, reveals that attitudes towards being a landlord in the current economic and political climate remain optimistic. Your Move’s Landlord Sentiment Survey 2018 found that over half of landlords (52%) feel positive about the market, whilst only 16% felt negative. An additional 30% felt indifferent about being a landlord in the current economic and political climate.

This highlights that landlords remain largely confident in their outlook, despite the influx of regulatory changes over the past few years and changes to the wear and tear allowance, additional Stamp Duty surcharges on second properties, and stricter portfolio lending introduced last year.

Your Move’s Landlord Sentiment Survey – which gathered opinion from nearly 1,100 landlords in June further reveals that the two most important considerations to landlords are ongoing maintenance and upkeep costs (83%) and the potential to make long-term profit (80%). In comparison, the least important factors are the tenant fee ban (43%) and the potential impact of Brexit (32%).

Despite these concerns, Your Move’s research reveals that most landlords are deciding to hold out and think about the long-term when it comes to their investment – nearly two thirds of landlords (64%) surveyed revealed they are unlikely to sell a property in the next year.

 Martyn Alderton, National Lettings Director at Your Move and Reeds Rains, says:

“Given the number of regulatory and tax changes in the Buy to Let market over the last few years, it wouldn’t be surprising if landlords felt some trepidation about the future. However, it’s great to see that the landlords we surveyed do, for the most part, remain positive about the future.

“Our research shows the majority of landlords are in it for the long term and that’s important for the well-being of the Private Rental Sector, providing much needed homes for those who cannot yet afford, or do not wish to purchase due to lifestyle choices.”

Source: London Loves Business