“It’s clear that the door has been opened for certain landlords, spotting the opportunity to expand their portfolios and set themselves up for more long-term returns from the property market.”
The property market has been through a tumultuous period recently, but the challenges have been welcomed by some.
One trend that we have seen of late has been the growth in landlords snapping up properties at below market value.
It’s clear that the door has been opened for certain landlords, spotting the opportunity to expand their portfolios and set themselves up for more long-term returns from the property market.
Spotting the opportunity
In many cases the properties are changing hands between landlord owners. The big difference though is they are generally being sold by amateur landlords, those with only a couple of properties or little experience, and being purchased by portfolio/professional players.
There are all sorts of different factors driving these deals. Rising arrears is an important one; the latest data from UK Finance shows just how much of an emerging issue this is becoming. It found that in the second quarter of this year there were almost 9,000 buy-to-let mortgages in arrears of at least 2.5% of the outstanding balance, a jump of 28% on the previous quarter.
That rise is even more significant when you focus on landlords with the ‘lightest’ levels of arrears, meaning between 2.5% and 5% of the balance. The 4,810 buy-to-let mortgages in this category represents a jump of 41% on the previous quarter.
With far more landlords now facing issues making their repayments, it’s little wonder that some are not only keen to sell up the property but accept an offer below market value in order to conclude a deal quickly. Getting the property off their hands as soon