Mike Collins Mortgage Advice – Is now a good time to be a landlord

Mike Collins, a financial advisor and property planner, is ahead in the market for the rental sector. He explained that if a landlord is already planning ahead, the most important decision you will make this year is to increase or decrease your portfolio.

“Interest rate are on the rise, forcing many to leave the mortgage market. With a shortage of affordable housing, this leaves private landlords in a situation where they may have no choice but to take on tenants because of necessity.

With the ongoing housing crisis, the UK relies heavily on landlords to keep it running smoothly. According to The English Housing Survey, there has been an increase in private landlords from 3.1million people in 2008 to 4.4million people in 2020. That is approximately one in five homes.

Due to the severe cost of living crisis, many are now facing higher mortgage rates.

However, the biggest group that is being affected by the new government legislation and its staggering rates are buy to let (BTL), landlords. Many have been forced to sell their properties. Tenants who are being charged spiralling rental fees, even if they live in poorly managed properties, are also feeling the pinch.

What is the best time to become a landlord in this broken market? Mike Collins explains.

Government rules

Landlords have had to deal with a number of government ‘interventions’ that have reduced their profitability. These include higher stamp tax rates in 2016 along with the removal of mortgage interest relief tax relief in 2017.

In recent legislation, landlords were required to maintain an EPC rating below C by 2025 for all new tenancies and 2028 if they have existing agreements. There are also rules that prohibit evictions for ‘no fault’.

Unregulated lending

Because landlords are a significant player in the bridging borrowing industry, there is a lot unregulated lending going on. Many landlords use their cash to make investments. BTL may become less attractive, and unregulated land bridging could suffer. However, there is a chance that the UK’s increasing population will lead to an increase in regulatory bridging.

The government predicts that over 25% of the UK population will be 65 or older by 2043. This would mean that there will be lots of downsizing.

Following the law

Paul Conway has created Yuno, a property tech platform that assists landlords to keep track of the latest legislation. Conway believes regulations for landlords should change on an average every nine days. Many landlords feel that changes in the future or recently are their main reason to sell.

Spare cash

It might seem easy to be a landlord, but it is much more than buying a place to let and then sitting still. Far from it. There will be some work involved in residential property. There are times when you feel overwhelmed, especially with rent arrears. Property damage and evictions to think about.

Investments will also need repair and refurbishment.

One thing is certain, almost all experts agree: an imbalance of demand and supply will continue driving rental growth in 2022. Therefore, if repairs and refurbishments are not in your budget, it might be worth holding out or buying your first Buy-To-Let if you’re able to find a good deal.

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