The study found that half of all landlords do not experience ‘void’ periods, with the average void period – when properties are left empty – usually around 15 to 30 days.
With rental income coverage on BTL deals at a minimum of 100 per cent, minimum rental requirements requested by lenders means that landlords can meet the cost of the void through their rental income. With 100 per cent rental cover, the average payment for a void of 15-30 days can be between £308 and £615 at a product pay rate of 4.99 per cent. At 125 per cent, and at a product pay rate of 5.49 per cent, the void cost can be between £338 and £846, though an excess of £2,059 is payable annually.
Where a void existed, the research showed that 42 per cent used their existing savings to cover the loss of income, 26 per cent used their regular income and 25 per cent covered the cost with income from other properties in their portfolio.
Phil Rickards, head of sales at BM Solutions, said, “It’s a fact that some landlords will face void periods – what’s important is how they prepare for them.
“Brokers have expert market knowledge, and landlords should seek their help when they make this decision.”
Alex Hammond, PR manager for Kensington, said: “Lenders are catering for void periods and one way is with the increasing popularity of flexible features on a BTL. Borrowers have the option to overpay on a mortgage or take a payment holiday so they can spread the risk.”
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