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Landlords' finances are at the healthiest in nearly 10 years

Monday 27 June 2016

Landlords' finances are at the healthiest in nearly 10 years, surprising figures have shown.

LSL Property Services has reported that buy-to-let mortgage arrears have dropped dramatically since the last quarter of 2015 and are at their lowest since the back end of 2007.

There were just 9,300 cases of mortgage arrears being three months overdue in the first quarter of 2016, a drop of 9.7% from the previous quarter.

The figures come despite sweeping Government changes to the rental sector which many experts predicted would leave second-home owners out of pocket.

This includes the recent hike in stamp duty, which came into force in April.

But LSL's Adrian Gill says the drop in arrears is due to lower tenant evictions, rent inflation, a more stable housing market and falling rent arrears.

He added: "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."

Government 'hurdle'

He warned landlords about the upcoming about the next Government 'hurdle' - the changes to tax relief or mortgage interest - but said many could avoid being left out of pocket.

"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," he said.

"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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