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According to research firm Landwood Group, nominations from bankruptcy specialists to manage the real estate and assets of distressed landlords have increased by 150% in the past six months.
The group said this was likely a result of regulatory pressure and increased tax burdens.
Holly Surplice, director at Landwood Group, said: “Recent legislative changes, fluctuating interest rates and rising costs of living have not only made rentals unprofitable for landlords, but also have long-term implications for the quality of the UK’s housing stock. It is having a wide-ranging impact.” .
“Especially now, with delays to the Tenants (Reform) Bill, landlords are at a loss as they see their costs soar while failing to improve their portfolios.
“A significant portion of this stock decline is due to buy-to-let portfolios that were purchased during the boom when prices were high and have since not fully recovered.
“In addition to purchasing at peak prices, increasing costs due to the economic downturn, increased regulation, and increased energy efficiency have made it difficult for landlords to maintain the quality of their investments and properties.”
Rising mortgage rates have made conditions for landlords much more difficult than they were between 2009 and 2021, when interest rates were rock-bottom and property financing was very cheap.
Some investors are increasing rents to cover high buying and selling costs, but market conditions mean this is not possible in all areas.
Some investors don’t seem to be putting enough effort into maintaining their homes, which could be due to a lack of the necessary funds.
Mr Surplice added: “Lack of maintenance is not ideal for a property’s curb appeal or value, but serious deterioration is now underway, with many properties becoming uninhabitable and falling short of health and safety regulations. We are seeing non-compliance.”
“As a result, we are seeing an increase in the number of landlords coming to us to auction their properties, as many are finding it difficult to continue operating.
“Our cases range from single-family home sales to portfolios of over 100 properties.
“Our online auction service provides a lifeline for homeowners who want to realize the highest return on their property.”