Statistics released by UK Finance this week reveal that the number of landlords who are in serious arrears with their mortgage have jumped by as much as 20%. It’s believed that as many as 1,200 buy-to-let mortgages were in “significant arrears”. That’s one fifth higher than the same quarter for 2016. The same report by UK Finance also reveals that 600 buy-to-let properties were re-possessed by banks during the final quarter of 2017, though that figure remains unchanged since 2016.

By contrast the number of homeowners with significant arrears fell by 1% over the period, as mortgage rates remained at low levels.

The number of homeowners with arrears of more than 2.5% fell by 7%.

The term ‘significant arrears’ refers to a landlord or landlords who owe more than 10% of the balance outstanding on their mortgage.

These arrears may likely have been caused by various tax changes that have taken place over the last couple of years. Among these is a 3% surcharge on Stamp Duty for any property a landlord purchases, coupled with a steady reduction in the amount of tax relief they are able to claim. Compliance Costs have also been raised too, creating further financial issues to an already troubled sector.

The Council of Mortgage Lenders had already warned that Landlords should be spared any new tax changes after a very “weak start” to 2017 for the UK buy-to-let sector. The CML had also forecast that total buy-to-let lending would reach £38bn in 2017 and suggested the figure would be the same for 2018, but it was actually much lower at £35bn in 2017 and now forecast to be lower still at £33bn in 2018.

David Cox, chief executive of the Association of Residential Landlords (Arla) Propertymark commented that, “Landlords are facing burden after burden placed on them by the government, which is significantly increasing financial compliance requirements. This is, in turn, causing landlords to fall into financial difficulties.”

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Currently, one of the biggest problems being faced by Landlords is the amount of time it takes to get a problem tenant evicted if they have stopped paying their rent, or are not taking due care of the property they are living in. At the present moment, this can take anywhere up to ten months during which time Landlords still have to pay the mortgage on the property even if they are receiving no rent.

The UK Government are trying to ease and speed up this process with the introduction of specialist Housing Courts to deal with these matters swiftly.

However, the Royal Institute of Chartered Surveyors have stated that this is forcing many landlords out of the property market altogether, as well as putting off potential new investors. Added to this is the concern that rent charges may increase over the next few months.