Mortgaged landlords
Tax Planning and Financial

His Lordship
His Lordship
10 Thanks
61 Posts
9 months ago

I was speaking to a fellow landlord yesterday who told me he went onto tracker rates with several of his mortgages around 2 months ago, as he thought fixing for 2 or 5 years at close to 5% interest was probably not a good move as everyone was saying rates would likely go down by the end of this year!

However, now that bank rates have increased he's now thinking that trackers were a mistake as they are above the previous fixed rates he was offered. It appears the opinions now are that rates above 5% are here to stay for a while - maybe a couple of years (who knows?). With fixed rates now well over 5% he told me it's not now viable for him to rely just on his portfolio income and he will need to get a job. However, any job he takes will tax him at 40% and because of his age and skills set he'd likely be on minimum wage, so earning around £6 an hr.

I asked him if he sold a few properties could he use the funds to pay down the mortgages on the others? He said yes, but he has AST's that have at least 6 months to run and even if so, if the tenants don't leave it would probably take a year to get vacant posession because of the failling court system. He contacted a" quick sale" company who said they would by with tenants in situe, but their offer was 70% of property value and after capital gains tax would be left with about 10K which would be enough to help him reduce his mortgage debt.   

There must be lots of landlords like him who are in real trouble now. Unfortunatley there is no quick way out if you NEED to sell, are we about to see a mass increase in landlord repo's?







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