LandlordBuyer’s latest research has uncovered an alarming escalation in landlord possession claims and repossessions for the last quarter of 2023, with totals reaching 23,282 claims and 6,649 repossessions.
Comparative data from Q4 2022 to Q4 2023:
- Landlord possession claims increased from 20,457 to 23,382
- Orders rose from 16,145 to 18,003
- Warrants went up from 8,778 to 9,833
- Repossessions grew from 5,427 to 6,649
Additionally, there was a noticeable uptick in mortgage-related claims and warrants:
- Mortgage possession claims surged from 3,163 to 4,384
- Orders climbed from 2,482 to 2,702
- Warrants increased marginally from 2,131 to 2,200
- Repossessions by county court bailiffs fell by 19% from 735 to 593.
Jason Harris-Cohen, Managing Director of LandlordBuyer, commented on the rising numbers:
“I don’t think any of the LandlordBuyer team was surprised to see the rate of repossessions, warrants and claims increase. Despite the average UK private rent increasing annually by 9%, landlord costs have risen exponentially, which has created a negative disparity. The most worrying element has been mortgage rates. Landlords coming off fixed-rate, buy-to-let mortgages have found new rates are double what they may have fixed into five years ago.
Refinancing in the buy-to-let sector now means very slim margins to work with and even heightened rents can’t make up the shortfall – especially as insurance policies, maintenance and materials have all risen in cost. It’s a simple case of the rent being received doesn’t always fully cover mortgage repayments.
LandlordBuyers’ research is not in isolation. In February this year, UK Finance figures found there was an 11% rise in repossessions of buy-to-let properties. It also found homeowners in mortgage arrears increased by 7%. Inflation that’s still a way off the Government’s target and stubbornly high fuel bills are squeezing everyone’s budget and for some, the mortgage isn’t always the priority.
Will we see the rate of landlord repossessions continue to rise? Potentially. The industry is still focused on the Renters’ Reform Bill and how landlords may have to adapt. We know the Bill includes the application of a Decent Homes Standard in the private rental sector, and finance may have to be found for improvements.
If Labour win the General Election, it’s thought it would pursue a minimum EPC rating of C for privately let properties. Properties that are currently a D or an E would need substantial investment for them to meet a revised requirement, which is another financial pressure.
If landlords’ only way of raising money for improvements is to remortgage, they will potentially overextend themselves and tread a fine line between profit and loss. It only takes an unexpected turn in the economy for rents to fall, tenant demand to decrease, and mortgage rates to rise. We really need the stars to align to see a fall in repossessions.”
