The mortgage arrears of UK landlords in the last three months of 2014 dropped to their lowest level since the first quarter of 2008, according to the latest figures from estate agent Your Move and Reeds Rains.
This was also the ninth consecutive quarter of improvements for buy-to-let mortgages in over three months of arrears.
At the end of last year, there were just 11,900 cases of landlords in sever mortgage arrears, down 4.8 per cent on the third quarter of 2014 and 27.9 per cent on the last quarter of 2013.
Adrian Gill, director of estate agents Your Move and Reeds Rains, comments:
“After the election result, many landlords will be grateful that certain policies are no longer an immediate threat. In particular, the long-term effect of rent controls would have only been to raise rents by squeezing supply, diminish the quality of rented homes and make life for tenants worse. Whatever the rather different uncertainties of a Conservative majority, it now looks like Labour’s rent controls are completely off the cards. A serious risk of disruption to landlords has evaporated overnight – and in the short term this will boost investment.
“However, in the longer-term, tenant finances are the most effective limit on rents. Tenants must be able to afford their rent for any landlord to realise their financial plans on paper. In this way landlords depend more on the prosperity of their tenants than on any particular policy or political environment.
“Given demand for homes to let is still surging, and the financial position of most households is starting to improve, the big picture is increasingly optimistic for any landlord looking to grow their portfolio. The only caveat must be that there is still a very small chance that tenants will fall into financial difficulties. Landlords can’t discount that completely – and need to keep all lines of communication open and investigate any potential problems at an early stage.”
