Surge In Buy-to-let Arrears ‘Bound To Happen'

19th August 2023

Riz Malik, founder and director at R3 Mortgages, said that growing number of buy-to-let landlords were "encountering serious financial challenges".

Malik continued: "Beyond escalating borrowing expenses, unpaid rents stand as a significant factor. Moreover, when landlords aim to offload their properties, the timing couldn't be less favourable in recent memory.

“Even at auctions, properties remain unsold. Regrettably, the Mortgage Charter offers no assistance to these landlords, despite their essential role in supplying housing in the private rental market. The surge in arrears was bound to happen and the outlook for many landlords is bleak."

Joe Stallard, director and adviser at House and Holiday Home Mortgages said that the “struggles continue for landlords”.

“In fact, it's downright brutal. Though the numbers are still relatively small, the rise in properties being taken into possession is a worrying sign, even if not entirely surprising given recent legislation changes that have come down hard on landlords.

“We mustn’t forget the knock-on effect this has on tenants. Punishing landlords this harshly will reduce the amount of good quality rental property available, which will increase rents and competition for those that don’t want to, or can’t yet, buy,” he added.