One-in-three people have missed payments on important household bills this year, according to a new study from the Money and Pensions Service (MaPS).
The survey of over 3,000 UK adults revealed that over 16 million people have missed payments, with more than two million failing to pay a bill for the first time this year.
The MaPS report found that credit card repayments were the most common unpaid bill at 11%, while utilities (10%), council tax or rates (10%) followed.
Shortly behind these were bank overdrafts or loans (8%), while one-in-20 had failed to pay rent (5%) or their mortgage (4%).
Despite this, only 62% said they would talk to their creditors about this, with 20% stating they would feel “embarrassed or ashamed”.
Additionally, some 17% wouldn’t do so for fear of being judged, 15% did not want to disclose something they weren’t willing to, and another 15% did not know that creditors could help.
BTL Insider asked professionals in the BTL industry whether they thought landlords had been impacted similarly.
Howard Levy, director of BTL lending at SPF Private Clients, commented: “If a client's business is property, then missing a mortgage payment is not an option — they typically will do as much as possible to ensure this doesn’t happen.
“The problems that can occur are dependent on the type of ownership structure a landlord holds their properties in; landlords who own in their own name are potentially going to have issues with making the business work, given recent changes.
“This is due to higher costs across the board — be it higher mortgage payments [or] having spent on EPC improvements — but the main issue for these landlords will be the much higher taxation based on gross rents.
“For professional landlords with properties in limited companies, the same increase in costs has occurred, but at least taxation offsets are available.
“Rates have increased for all, but so have the rents to offset this.
“With numerous properties, the risk is spread across [multiple] rental incomes/tenants, so an issue with a single tenant not paying their rent is not necessarily a major one.
“Cash reserves are imperative in any market, but especially so now — large portfolio landlords also typically have larger cash deposits available, so they can purchase quickly when they see an opportunity, but also cover any outgoings that may arise.
“These larger landlords can often re-house tenants where they have taken on properties that are now beyond their means due to changes in costs, or any other reason, by moving them to smaller properties, for example.”
Sam Norris, managing director at Grand Union Finance, also shared his insight: “Given how terrible the image of landlords is in the UK, some of the stories of how well some of my landlord clients have treated their clients in recent months has been astonishing to be quite honest.
“Rent holidays, rent reductions, and not increasing rents to market values are just some of the ways I have seen my clients help their tenants who are having financial difficulties.
“On the flip side, we have certainly seen a marked increase at Grand Union Finance of enquiries where the landlord has had some recent adverse over the past 12 months.
“Clearly, landlords, like everyone, are feeling the strain at the moment.
“Of course, we keep hearing that landlords are selling en-mass — with what we have seen in recent months, this doesn’t surprise me, but I do hope investors remember that property is a long game, and interest rates are not permanent.”
Narinder Gill, associate at Coreco, added: “We are seeing instances of low-yielding properties in the South East and London struggling to support higher lending costs.
“Landlords are under pressure and hope the government takes note — there is only so much rents can be increased with tenants feeling the strain of increased cost of living and inflation!”
Jonathan Samuels, CEO at Octane Capital, believes the latest missed payments figures will not have a strong impact on landlords: “The rising cost of living has surely affected almost all facets of life, and tenants will be feeling the squeeze from higher rent, along [with] other pressures.
“However, landlords are the beneficiaries of this surge in rental income, and most will be on a fixed-rate BTL mortgage.
“Therefore, in theory, landlords’ ability to service their loans should be minimally impacted.
“Our own experience as a secured first-charge lender is that we are not seeing an increase in missed payments from borrowers.”
