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Expert research has found that there are more buy to let repossessions and arrears on the way for the small 'amateur' landlord – so act now and get some good financial advice.

The agency BDRC did some research for the British Property Federation’s Residential Conference, and asked 500 British landlords what they expect from the coming year.

Unfortunately the survey found a market characterised by over-supply, reduced rental incomes and less hope of securing finance. It found that 7% of private landlords had been involved in some repossession activity by a lender and 2% of landlords believed repossession proceedings against them are imminent.

Of those asked, 4% had missed at least one mortgage payment in 2008 and 8% said they are very likely or quite likely to miss a mortgage payment in the next three months.

The report says those with 20 or more properties, or 'professional landlords', are still enjoying higher profits in the current climate. Not only are 100% of professional landlords making a profit, but they are also taking advantage of falling property prices, repossessions, auctions and sale and rent back schemes to add to their portfolios. Amateur landlords by comparison are much less likely to be making a profit – 15% with one property and 7% with two to four properties say they are making a loss at the moment.

Mark Long, client services director at BDRC, says “The credit crunch has polarised the private rental market. Whilst professional landlords are able to cover their costs and expand their portfolios, the amateur landlords, many of whom ‘fell’ into letting by accident, are really starting to feel the pinch. Our research shows that thousands of private landlords expect to fall behind on mortgage payments in the next three months and a considerable proportion are likely to face repossession on one of their properties.”

This means many thousands of landlords have to act quickly to avoid repossession and arrears. Talking to a mortgage adviser may solve some of these problems – mortgage breaks and modifications, remortgaging and secured loans are all options to help stave off problems for buy to let investors.

SOURCE: BDRC, 27/01/09

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