Negative equity fears for landlords

Buy-to-let investors currently face falling into negative equity quicker than those who own and occupy their own home, it has been found.

Standard and Poor has released a report which estimates that 20 to 40 per cent of those who buy houses and then set up a tenancy agreement to rent them out could be in negative equity by 2009, Contractor UK reports.

This is due to falling house prices which are resulting in an increasing number of repossessions.

In June, the agency also found that 3.7 per cent of landlords were in arrears, compared to 2.9 per cent of normal homeowners.

Standard and Poor analyst Kate Livesey said: "We believe that the buy-to-let sector could suffer above-average loss severities on repossession cases due to a concentration of certain property types that are witnessing above-average price declines."

Earlier this month warned that some landlords may face problems in the future if their tenants cannot pay rent due to financial difficulties.

Published on: November 18, 2008

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