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Landwood Group witnessing surge in struggling buy-to-let landlords

There has been a 150% rise in appointments from Insolvency Practitioners to manage the properties and assets of struggling buy-to-let landlords in the past six months, according to surveyor Landwood Group.

The group said this likely comes as a result of increased regulatory pressures and tax burdens.

Holly Surplice, director at Landwood Group said: “Recent legislative shifts, fluctuating interest rates and rising living costs has not only made it unprofitable for buy-to-let landlords, it is also having a prolonged impact on the quality of the UK housing stock.

“Especially now, with delays to the Renters (Reform) Bill, landlords are left in limbo watching costs soar while they are unable to improve their portfolios.

“A significant portion of this declining stock stems from buy-to-let portfolios purchased in better times when prices were higher and which haven’t fully recovered since.

“Purchasing at peak prices, coupled with economic downturns, more regulation and increased costs due to tightening energy efficiency rules, has left landlords unable to maintain their investments and property quality.”

Rising mortgage rates have made conditions far more challenging for landlords than between 2009 and 2021, when rock bottom interest rates made financing a property very cheap.

While some investors have raised rents to cover higher buy-to-let costs, market conditions dictate that this isn’t possible in every area.

It seems some investors are failing to do their bit to maintain their homes, which may be as a result of lacking the necessary funds.

Surplice added: “A lack of maintenance is not ideal for a property’s curb appeal and value, however, we are now seeing serious deterioration leading to many properties becoming uninhabitable and non-compliant with health and safety regulations.

“As a result, we’re seeing a rise in the number of landlords coming to us to auction their properties, as many are finding it too challenging to continue operating.

“We see cases ranging from sales of single houses to portfolios of more than 100 properties.

“Our online auction service offers a lifeline for landlords who wish to realise the best returns on their properties.”