Landlords Ready for Massive Rise in Rent Arrears

Regular readers will know I have been predicting the post Xmas rent arrears debacle since November.

YouGov published a report yesterday showing a third of people cutting back on food and fuel to pay rent and this is at a time when mortgage interest rates are at an all time low. When the interest rates finally rise where are landlrods going to go to find the extra money? To their tenants who are already cutting back on food and fuel?

When tenants cant afford the rent the landlord cant afford the mortgage, It isnt rocket science seeing where this is heading.

And yet weve been here so many times before

Interest rates for people that took out base rate tractor mortgages
a few years ago are at an all-time low. 
However interest rates on new BTL mortgages don’s seem to be not much
lower than they were 5 years ago, as the spread the banks demand over base rate
has increased greatly.  

Landlords are making very mixed profits depending on their mortgage
and when they were taken out, but very few landlords can buy more properties without
having to pay high mortgage interest rates.   (So the supply of rental props is not
increasing at the rate that the current profits of some landlords would normally
lead to.)

I don’t think the Bank of England will put up base rates
until the banking system is in a better state, by then banks will be demanding
a lower spread over base rate, so the costs of a new mortgage may not go up
much at all.

So Ben, we do live in very interesting times

I see you having to order a bigger IN tray BEN!!!

Haha yeah, I feel like the Welsh Guards at Rourke’s Drift waiting for the inevitable onslaught

Just to be historical it was the South Wales Borderers!
I must have watched that film about 10 times now!!!
Also it may be of interest to you but someone was posting that they had not been told about the LHA changes of the ages by Lewisham council
Go onto propertyhawk.co.uk and on the left hand side click on LHA -train crash and someone is moaning about Lewisham council etc

Paul out of all the things I expect to be ripped to shreds for on Property 118 it isnt my knowledge of British County Regiments 1870 – 1910 haha. Did you know I have actually held a Martini-Henry rifle that was used at Rourke’s Drift? How cool is that.

Couldnt see the thing on Property Hawk but I am surprised that people would criticise Lewisham we mus be the most efficient and professional outfit in the whole of South East London

Definitely cool. they take great big cartridges a sample of which I saw when we attended a flooding at Purdey’s;  no not the New Avenger, the gun shop in London!
Wouldn’t fancy being hit by one of those!
The item is definitely there on propertyhawk
Type in the search box
LHA -Train Crash on the website

You would think with the BOE helping out landlords with low interest rates then at least in return they can lower rents for tenants.  All this above inflation rent increases stinks of greed.  Landlords who keep uping rents deserve to be burnt.

You seem not to realise that most landlords are not in a good position if they bought post 2005.
Most have negative equity and the only reason they are surviving and you have somewhere to rent is low interest rates.
When I bought  nearly at the top of the market in 2007 I was subsidising the mortgage by £150 per month as the rents wern’t suficient.
I have still not recovered my losses from that time to now even though I am ostensibly making a ‘profit’

Your mortgage payment depends on which rate the lender is following – one of mine is BoE base rate but another is 3 month LIBOR which keeps going up!!! Now nearly 70% more than the other!!