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Number of buy-to-let landlords struggling to pay mortgages hits 2-year high

A growing number of buy-to-let landlords are struggling to keep up with their mortgage payments, new figures show

Mortgage arrears among landlords increased by 6%, from 4,700 to 5,000, between July and September last year, which was the first increase since records began two years ago, according to the Council of Mortgage Lenders.

Following a stampede of buy-to-let activity early last year ahead of the introduction of the 3% stamp duty surcharge in April 2016, fewer investors are now adding to their property portfolios. But some experts fear that many buy-to-let landlords, especially those entering the sector for the first time, rushed into acquiring property that they could not afford last year to avoid being hit by the higher tax on additional homes.


Richard Lambert, chief executive of the National Landlord Association (NLA), told the press: “Some first-time landlords may have rushed in to the market ill-prepared to beat the stamp duty hike.

“Unless landlords begin to make plans to mitigate the impact of these changes, it’s likely that buy-to-let mortgage arrears will continue to rise.”

The rise in the volume of landlords falling into arrears has led to concerns that thousands more landlords could fall into debt when they are hit by further tax hikes from April.

The existing rules that permit landlords to offset all of their mortgage interest against tax will, from April 2017, be phased out, restricting the amount of mortgage interest landlords can offset against tax on their property investments.

The NLA estimates that around 440,000 basic-rate tax payers will be forced into a higher tax bracket from April 2017 once planned changes to landlord taxation comes in to force.

By April 2020, once they have been withdrawn altogether, the disastrous consequences of Section 24 will mean that it is likely that higher-rate tax payers will only receive 50% of the relief that they currently get, with various experts having already warned that landlords will be left with little alternative but to pass higher costs on to tenants.

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  • Brit Sixteen Sixty Four

    How can buy to let landlords be in such financial trouble with mortgage rates at record lows. Its down to their irresponsible action and not the government, landlords should take responsibility for their high risk actions and stop blaming others.


    I agree but there are no numbers quoted in the increase of landlords so the increase may just be down to higher numbers of available rented property. 300 more in arrears is a very small number and I would think it is far lower than the number of new rentals made available. It could also perhaps be down to landlords being unrealistic on their perceived rent levels as so many agents are frightened to tell the truth. And no information is included on the number of landlords hit but bad tenants forcing them into arrears through little fault of their own.

    This is just a silly exercise on %age crunching to make a headline.


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