The need to re-address the structure of your property portfolios as a result of this dreaded coronavirus has become all the more alarming. The problems landlords face require their immediate attention:
1) Rental problems for tenants: it is becoming blatantly obvious that tenants are struggling. Businesses are being forced to close. Income is being reduced or restricted. Jobs are being lost. The ability to make monthly payments is under severe pressure.
2) Banks issuing margin calls: even a year ago banks started tightening up on their “Affordability Index” for landlords. Some banks started even before coronavirus, issuing margin calls e.g. requiring greater equity. With mortgages reaching term date, lenders are clearly concerned about yet another fall in property values and therefore sufficient affordability within their agreed margins.
3) Rates will rise: anyone can see that mortgage rates are really at an all-time low. They only have one way of going, especially after the debt and insolvency that will follow.
4) Tax rates will go up: This all has to be paid for somehow. Whilst the government will issue bonds to keep inflation down, someone has to carry the burden for this seismic government debt that we will end up with after Coronavirus ends.
If this isn’t clear enough, what is? Don’t put your head in the sand – now is the time to act, whilst you can – whilst you’re not being pressured by lenders or governments & before banks really start. Let us help you reduce those overheads, minimise your cash flow outgoings and maintain the tax-efficiency and economic viability of your retirement portfolios.
