Buy-to-let boom…. gloom and doom one in five landlords could be bankrupt
Everybody reads about how lucrative it is to be a landlord causing a new influx of investors coming into the sector; however a new report is claiming that this may not be the case, as one in five landlords over the next two years may be forced out of the market.
From a legal firm’s annual report on Landlords, the company predicts that more than 20% of landlords may decide or be forced to quit the private rented sector.
The reason is because of the massive amounts of money that landlords are losing and paying out every year which apparently, is as high as £10 billion.
Unsurprisingly unpaid rent accounts for £900 million, but it is damage to properties and together with repairs that a year that are annually costing landlords across the UK a staggering £4.5 billion each.
The costs in unpaid rents, eviction processes together with the government’s ‘hatchet’ job of reducing tax breaks for landlords, paints a far different picture from the one presented in the media.
Richard Merrick of PIMS, said: “Osborne has defended his plan for reducing tax breaks for landlords by saying he wants a ‘level playing field’ for those buy-to-let investors and private homeowners, which is nonsense.
“The press has always called the private rented sector as being an easy way to make money, without any of the reporters being involved themselves. It is a tough business as more and more tenants are becoming ‘non-rent payment savvy’ and causing huge losses to landlords as well as damaging properties”.
Richard concluded: “The culture to reward ‘rogue’ tenants by housing them, despite consistently offending, is extremely frustrating….and you hear very little of this in any of the news.”
Those who have recently entered private rented the sector using their pension pots may be finding the whole process of being a landlord can be fraught.