The research, commissioned by the National Landlords Association, also noted that while large landlords can use rental income from their other properties to cover voids, more than four in 10 landlords have been forced to raid personal savings to meet their mortgage commitments.
But Ben Gardner, managing director of Manchester-based Gardner Finance Ltd, said that voids have not proved a major headache for his clients. “Many of them are still on very low trackers, so they have tiny mortgages to service – sometimes just £50 a month, which they can cover, even if they have a void period.”
Andrew Montlake, director at Coreco, agreed that voids are not a widespread problem: “I bet that the landlords suffering voids bought the development type of properties that the market was awash with a few years ago, which no one wants to live in.”
Both reckoned that the biggest problem for buy-to-let landlords is actually restricted mortgage funding. Gardner explained: “I have a lot of frustrated buy-to-let clients who want to expand but cannot refinance to get the equity out of their current properties to raise a deposit.”
This increased appetite from landlords to expand is borne out by a recent study from LSL Property Services. It found that 40% of large scale landlords plan to grow their portfolios in the next year.
But funding problems remain. Only 13% of landlords have actually taken out mortgages in the last 12 months and two-thirds claim that it is harder to get funding now than a year ago.
Montlake agreed: “The main issue is around LTVs. No lender will offer more than 75%, which I expect to stay the case this year. Once there is a little more competition, we will see a loosening of criteria. We are beginning to see the rumblings of the return of buy-to-let. A couple of lenders have come out with more attractive products, and there are rumours of more lenders coming back into the market.”
