The BBC reports that Buy to Let landlords are losing their properties at three times the rate that ordinary landlords are.
Part of the problem seems to be down to landlords buying expensive city centre flats duting the property boom, which they can’t let for enough money to cover the rent in the recession. Because property prices have fallen, Buy to let landlords can’t sell the flats either. They have no choice but to tough it out and see if they can ride the recession out.
Landlords in this situation should simply cut the rents to whatever the market can bear, and even consider letting the flats per room (as bed-sits in a shared flat). Basically the aim is to get some money coming in. If the amount falls short of what the mortgage requires, they should simply bite the bullet and make up the difference from their own pockets rather than let the property go. The best way to protect yourself is to make sure that any profits are ploughed back to making capital repayments on the mortgages – that way, should you need to re-mortgage, you should still qualify for the best deals because the amount you wish to borrow will have dropped.
Property prices will always rise again, especially in the UK where a limited amount of land is developed for housing. It’s simply a question of waiting things out.