42% of landlords to take up BTL mortgage holiday offer during crisis, survey reveals

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Research was conducted among 1,000 landlords in Scotland where landlords are able to access a much wider range of support measures than in England and Wales.

Scottish landlords fear taking a mortgage holiday will affect their ability to get lending for future buy-to-lets but nevertheless 42% will eventually sign up to one, according to new findings from property firm Portolio.

Its survey of more than 1,000 landlords found that 58% haven’t asked for a mortgage holiday, as many are worried about their credit history, and others fear they could trip up by finding out they don’t have the correct BTL mortgage.

But tenanted property agent Portolio believes as many as 40% will take the step before the COVID-19 pandemic is over.

“We’ve also spoken to three or four mortgage brokers now who have advised their investor clients not to take holidays as they are fairly sure it will have a negative impact on re-mortgage applications with some – maybe not all – lenders for the next 12 months,” says MD and founder Chris Wood.

While almost a third (60%) would struggle to pay the mortgage on their tenanted property if a tenant didn’t pay the rent, 52% have no intention of applying for an interest-free loan offered by the Scottish government and just under 30% are undecided, indicating that most aren’t keen on getting into any further debt, says Wood. 

Rent payment troubles

The survey – to discover the impact of COVID-19 on the private rented sector – also found that a staggering 50% of landlords’ tenants have trouble paying rent, with some believing this was likely to increase the longer the lockdown continues. 

Just over a quarter have experienced tenancies being unexpectedly terminated, possibly due to student tenants quitting, with almost 13% having tenants vacating properties and ditching belongings. Meanwhile, 21% of landlords report new tenancies starting during the lockdown, helped by the popularity of virtual viewings.

Adds Wood: “We found 92% feeling happy with their
letting agent during the COVID-19 lockdown. This is a testament to all those
hard-working letter agents out there who are doing a stellar job.” 

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