Looking back over the last six months, 44 per cent of landlords have experienced rental arrears. This goes some way to explaining the significant rise in repossessions and why a growing number of landlords are having problems meeting their mortgage repayments.
When faced with arrears, only 50 per cent of landlords attempted to recover the loss of earnings through the courts. For the most part, landlords found the court system straight forward but many reported waiting times of over three months before their case was even heard. One respondent said: “The court process for evictions takes far too long which could potentially lead to hardship for many landlords, especially smaller ones.”
David Salusbury, Chairman, NLA, commenting on the rise in this significant rise in rental arrears, said: “This is becoming a serious problem for landlords all over the UK. Paying the rent has to be right at the top of tenants’ priorities as even one month’s arrears, in this climate, could be the straw which breaks the camel’s back. The mortgage has to be paid and the vast majority of landlords do everything in their power to make sure this happens.
“It is important to remember that only about 35 per cent of rental properties are secured on existing buy-to-let mortgage finance. Contrary to recent reports, most landlords are not expecting to be repossessed and lose their asset. Landlords and tenants need to communicate and work together to tackle financial problems before they result in a loss of rent and a potential default on mortgage repayments.”