There’s been a huge rise in the number of buy to let property repossessions in the first quarter of 2024 compared to the same period 2023.
A report from lenders’ trade body UK Mortgage says there were 500 BTL mortgage possessions taken in Q4 2023, up 56.3 per cent on the same quarter a year previously.
And the same report reveals that at the end of Q4 2023 there were 13,570 BTL mortgages in arrears greater than 2.5 per cent of the outstanding balance.
This was no less than 123.9 per cent higher than in the same quarter a year previously.
The report also gives a series of other stats from the sector.
For example, the value of new BTL lending for the UK in Q4 2023 was £6.3 billion, down 55.4 per cent compared with the same quarter in the previous year.
And the average gross BTL rental yield for the UK in Q4 2023 was 6.74 per cent, compared with 5.85 per cent in the same quarter in 2022.
A corresponding figure is that the average interest rate across all new BTL loans in the UK rose to 5.7 per cent in Q4 2023, up from 3.67 per cent a year previously. As a result, the average buy-to-let interest cover ratio (ICR) for the UK in Q4 2023 fell to 180 per cent, compared with 238 per cent a year previously.
The number of BTL fixed rate mortgages outstanding in Q4 2023 was 1.37 million, 1.7 per cent per cent up on a year previously. In contrast, the number of variable rate loans outstanding fell by 12.7 per cent to 0.62 million.
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No mention of Section 24 which artificially pushes landlords into a higher tax bracket. That in turn denies them Child Benefit and to only half as much tax free interest on savings.
Very few landlords would be able to increase rent by enough to cover the extra mortgage interest and extra Section 24 tax.
To cover a £500 increase in mortgage interest rent has to be increased by £667 for a 40% tax payer to stand still. That gives them nothing to go towards higher insurance or maintenance costs.
Landlords who have high levels of mortgage borrowing must be having real difficulties if they haven't had chunky pay rises in their day job. Even then subsidising BTL from a day job isn't a long term solution.
Exactly Private Landlord Crisis that’s the Plan it was designed to happen nothing unexpected when Government decided this. We are being replaced by Corporate Company Landlords & Developers why else would Mr Gove be planted there the Architect of the Scheme having previously been sacked.
That’s what Section 24 is for to Bank Private landlords and not applicable to Companies and pay increased tax up to 45% instead of 25% for Corporate and can claim all their expenses.
Licensing Schemes is another big one that doesn’t apply to Corporate who have more than 3 Flats in a Block a right stitch up, now used by some Councils to keep landlord’s property vacant by saying you can’t let without a licence and sit on the Application for 12 Months and more + charges you double C/tax in the meantime even though the property was licensed 3 times before inspected & pass but come up with new extra requirements.
THE RENTERS REFORM BILL removing Section 21 that was never needed other than to deliberately destroy Private Landlords, otherwise why would thousands have sold up if its not from the financial hit of S.24 and the Licensing
Schemes it has to be the removal of S.21 landing you with Sitting Tenants totally unacceptable and Gove knows it which is why he’s doing it and to pull the wool over the Tenants eyes pretending he’s looking after them while he caused their Rent to shoot up 20/30% yet retained fixed term (S.21) let’s for students letting which again is now the Big Boys taking over that market like 700 high rise Students Flats at Hanger Lane, so homeless is not a priority.
Housing Crisis, hardly breaking news & large numbers of Repossessions when Housing Policies were introduced to make it happen.
It is time the discrimination between Corporates and PRS challenged in the High Court. Why should there be different rules for the Corporates? We are all landlords and should be treated the same. They won’t be providing social housing. That will be left to the PRS. It is quite wrong for the PRS to be treated differently and must be challenged. As I have said before forget NRLA we need a proper representative Landlords Association.
Tip of the ice berg, you ain't seen nothing yet
You took the words right out of my mouth. It's going to be eyewatering.
Get rid of your older properties and take the CGT hit now as Labour have already stated they intend to increase it. Then form a limited company so you become a corporate yourself and put all your properties into it. Yes it will be a taxable event but won’t impact your more recently acquired properties so much. I am NOT a tax/investment expect however this is something I am considering.
I haven't seen the current CGT proposals but at the last General Election the Labour policy was to charge CGT at your marginal rate on an indexed gain. 40% of an indexed gain is way, way less than 28% of the whole gain as it takes inflation into account. It was the only policy either party had that I really liked.
See my post above I meant to type “tax/investment expert”. I do dislike predictive text!
In case you are not aware, there is an option to edit your posts.
If these lenders are going to stand any chance of repairing thier ‘buy to let loan book’ (worth billions!) then they need to get behind landlords, get political and lobby hard for the removal of Sec 24.
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