UK Buy to Let Landlords to Be Wary of High Income Tenants

According to the research conducted by UK’s largest tenant eviction and rent collection service bureau – Landlord Assist – residential buy to let landlords with property portfolios consisting of expensive flats are more likely to face arrears.
Despite the fact that it seems more logical that tenants with lower household income are more prone to falling into arrears, the research of Landlord Assist showed that tenants with high income have been hit hard by the economic downturn and, as a consequence, oftentimes fall into arrears on rent payments.
Landlord Assist’s managing director, Mr. Graham Kinnear, says that many buy to let landlords, assuming that expensive residential rental properties require less investments and management than relatively cheap buy to let properties, are mistaken. In reality, high income tenants often do cause more problems to landlords than low income tenants, especially these days.
Experts of the tenant eviction service suggest that landlords reference all potential tenants, regardless of their income level. In the opinion of Mr. Stephen Parry, commercial director of Landlord Assist, referencing tenants is a very useful practice that UK buy to let landlords should embrace as it helps to ensure that rent payments will always be made in a timely manner.
Meanwhile, the latest report on gross mortgage lending in the buy to let sector in the 3rd quarter of 2009 published by the Council of Mortgage Lenders suggests that lending volumes grew for the first time in 2 years.
Gross mortgage lending for buy to let purposes increased by 10% in the 3rd quarter of this year and reached £2.1 billion. In addition, the number of approved buy to let mortgage loans also increased for the first time in 2 years, rising from 21,600 in the 2nd quarter to 23,700 in the 3rd. The improvements, however, do not bring the UK buy to let mortgage market back to its position in 2007, when gross mortgage lending was much more impressive.