landlords punished for taking mortgage holidays

Mark Webb, 49, a Bristol landlord, helped his tenants by passing on the payment holiday he took on one of his eight properties. However, he has since had mortgage applications for other properties repeatedly rejected.

He feared he would be left paying higher interest rates as a result of helping his tenants. After weeks of trying, Mr Webb finally found a bank willing to offer him a mortgage.

“It was a headache,” he said. “Some tenants had been affected by the situation, some hadn’t. But if landlords had known about this at the beginning they might have thought twice.”

Angus Stewart of Property Master, a buy-to-let broker, said a growing number of landlords were being caught out. “Many took repayment holidays in good faith when their tenants had trouble making payments,” he said. “But lenders are adopting a view that rather than it being a prudent thing to do, it signifies that the landlord’s finances are under stress. For many this is far from the case.”

As well as those trying to refinance existing loans, landlords who want to buy new properties have also encountered difficulty. There has been a boom in the number of property investors who want to expand their portfolios after the Chancellor’s temporary cuts to stamp duty in England and Northern Ireland.

Since April 2016 buyers of second homes and buy-to-let properties have had to pay a 3 percentage point stamp duty surcharge. First-time buyers and home movers have now largely been exempted from the tax. While landlords remain subject to the surcharge, they can still make large savings.

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