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Landlords' finances hit 2007 levels of health - despite Brexit!

Thursday 21 July 2016

Despite grim predictions of economic turbulence post Brexit, a new study has revealed that landlords' finances are the healthiest they have been in nearly ten years.

 A survey by LSL Property Services discovered that BTL mortgage arrears have fallen dramatically since the final quarter of 2015 and are now at levels not recorded since the same period in 2007.

In first three months of 2016, there were only 9,300 cases of mortgage arrears being three months overdue - a substantial drop of 9.7 per cent from the previous quarter.

The findings demonstrate a real cause for optimism in the rental sector - especially when the various challenges which the industry has faced are factored in.

A number of regulatory changes, like the increase in the stamp duty surcharge which was introduced in April and cuts to tax allowance which will come in next year, prompted some experts to predict that landlords would suffer financially.

The upbeat trend suggests that a combination of rent inflation, decreasing rent arrears, fewer tenant evictions and a more stable housing market, has successfully offset the obstacles created by former Chancellor George Osborne. 

These 'anti-renting policies' are described by LSL's Adrian Gill as 'well-intentioned but possibly misguided attempts' to cool the housing market.

He still recommends that landlords should make every effort to build their cash reserves and give serious consideration to facing further threats.

The good news is that landlords are well placed to take stock of their business models.

While it seems our political masters have no clear idea of how Brexit will affect the country's fortunes, it seems sensible for landlords to take advantage of this period of calm and future-proof themselves, and their investments, against the threats that will definitely be introduced. 

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