Third of buy-to-let investors 'battered'

The extra checks on tenants made last month appear as a response to the "battering" that some buy-to-let investors are taking in the recession, a new study shows.



Rental arrears, voids, repayment issues and repossessions are among the pressures that landlords have been more likely to have felt in the past 15 months, said BDRC.



In its poll of 500 landlords, the research agency found that less than a fifth suffered rental arrears in March 2008, compared with almost one in three 15 months later.



More than a third were forced to cover the cost of non-payment of rent from their tenants' deposit, and nearly as many (32%) have taken eviction against their tenants.



Add to this "battering [that] some have taken in the recession" with the burden of new legislation for all landlords "and you might ask yourself why anyone would be a private landlord in today's economic environment."



However BDRC added that its research suggests that while there are "undoubted challenges" in the current economy, some private landlords quizzed in June feel that the worst is over.



The economic indicators that the firm's Landlords Panel has measured since 2006 - capital gains, rental yield and overall letting prospects - suggest confidence is returning for one in five landlords.



For example, 19% of respondents thought the prospects for rental yields in the next three months were 'very good,' and 17% said the same about the lettings sector over the same period.



Some of the optimism was put down to mortgage finance still being difficult for would-be buyers to secure, amid loan-to-value on mortgages at 25% to 40% as standard.



Reflecting on the findings, Mark Long, BDRC's director, said: "It is clearly a tough time for private landlords, with many more experiencing arrears and the longest void periods than at any time since we started tracking this market in 2006.



"However there is a feeling amongst some that prospects are good for the next three months as demand for rental property is fuelled by the restrictions on residential mortgage lending, making it hard for many people to buy properties."