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Thursday, June 16, 2016

BTL mortgage arrears lowest since 2007

Thanks to falling rent arrears, lower tenant evictions, low interest rates, rent inflation and a stable housing market, landlords are managing to better meet their mortgage repayments.

LSL reports that during Q1 2016 they saw a drop in  buy-to-let mortgage arrears, seeing just 9,300 cases over the period, down  9.7% from Q4 2015.

The quarterly figure is the lowest recorded since Q4 2007.

btl mortgages arrears graph q1 2016

LSL Adrian Gill comments: 

“Landlords’ finances are the healthiest they’ve been for nearly a decade. 

Any new risks for landlords are now as a result of anti-renting policies – well-intentioned but possibly misguided attempts to further improve the private rented sector. Landlords witnessing this storm of regulatory change will need to build their cash reserves and reassess their business models. But they are in a very good position to do so.

Looking ahead, the next hurdle put up by the Government will be the coming changes to the tax relief of mortgage interest. For many smaller landlords and for those without significant external income, the phasing out of tax allowances at the higher rate could be minimal if they don’t fall near the higher tax bands in the first place. But professional landlords with more than a couple of properties could be hit harder.

Regardless of their situation all landlords should know where they stand – with a
revised plan and the proper advice to make sure they can continue to operate successfully under the new rules."

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