Many landlords are feeling the pressure from increasing interest rates, higher property prices, and occasional tenant problems, all while trying to keep their properties running smoothly.
Interestingly, recent data from UK Finance revealed that there were 11,380 buy-to-let mortgages with arrears of 2.5% or more of the balance during the first quarter of 2025. This is a 6% decrease from the previous quarter. While some landlords still experience challenges, the total number facing major arrears is relatively low.
But there is no need to panic. You can take steps to regain control without losing your properties.
We, at Allied Property Management, provide practical help and guidance to support landlords. Let us explore the steps you can take to regain control of your mortgage payments and get your finances back on track. Keep reading!
Smart Strategies for Managing Rising Mortgage Costs
Here are some smart strategies for managing rising mortgage costs:
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Don’t Ignore the Problem – Open the Letters
If you face financial difficulties, the first step is to read your letters. Ignoring them will only make things worse. It is tough, and the stress is real. But if you are behind on mortgage payments, it’s best to address the problem sooner rather than later.
Start by contacting your lender. Many lenders want to help homeowners who are having temporary financial issues. You can extend your mortgage duration, choose to pay only interest for a while, or even take a break from payments. The key is to reach out early rather than letting the problem escalate.
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Check Your Current Rent Levels
Have you checked your rental prices recently? Rental costs often rise due to inflation and increasing demand for housing. It’s essential to verify that you are changing the correct market rate. If not, consider a slight rent increase.
Surprisingly, latest data from the Office for National Statistics (ONS) found that average monthly private rents in the UK increased by 7.4% to £1,335 in the year leading up to April 2025. This indicates a continued rise in rental costs nationwide.
A slight and fair rent increase can avoid some financial pressure, especially if it has been a long time since your last rent adjustment. Be honest with your tenants. Good communication is key – explain why you are increasing the rent and how it benefits both of you in the long run.
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Review Your Property Expenses
Cutting expenses can be as necessary as making more money when finances are tight. Look closely at your property expenditures, like insurance, letting agency fees, and maintenance agreements.
You might be surprised by how much you spend on services that you could negotiate or pause for a while. Consider doing minor repairs yourself instead of hiring someone, or ask contractors about cheaper options. Small changes can have a big effect on your overall cash flow.
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Consider Refinancing or Switching Lenders
If you have a variable interest rate, your monthly payments may increase faster than you can handle. Consider refinancing or switching lenders to secure a better deal.
Although re-mortgaging may seem scary, it can help you lower your monthly mortgage costs. Compare different rates and consult with a mortgage broker who specialises in rental properties. They can help you find a deal that suits your needs.
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Talk to a Lettings Expert
If you manage multiple properties or encounter issues with tenants, it may be beneficial to seek support from a property manager or lettings agent. A skilled property manager can enhance your operations, decrease vacancy times, and improve tenant satisfaction, ultimately increasing your rental income.
Let agents know the local rental market well and can advise you on how to boost your properties for better returns. Having expert guidance can make a big difference, saving you time and money.
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Explore Formal Help for Deeper Financial Stress
Sometimes, difficulty meeting your mortgage payments is not just about one property but rather a wider financial strain across your portfolio or personal finances.
If that sounds familiar, a licensed insolvency practitioner like Insolvency Online can help you explore formal debt solutions such as IVAs or bankruptcy support. These services do not directly renegotiate mortgages, but they may help stabilise your situation by dealing with other pressing debts like protecting your income and assets where possible.
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Weigh Up Whether It’s Time to Sell
Sometimes, selling a property that is causing more financial stress than its worth is the best choice. It doesn’t mean everything is over; it could be a fresh start for you.
Before making any decisions, have a professional evaluate your property. Make small repairs to boost its market value. While selling may not always be the top option, if the property is affecting your finances, it helps ease your stress.
If you are having trouble with rising mortgage costs and considering selling your home, you are not alone. In early 2025, the number of new mortgage possessions in the UK increased by 12.3% compared to the previous quarter, reaching 2,307. This shows the financial pressures many homeowners and landlords are facing.
Tip: Consult a professional to evaluate your property’s value and explore your options.
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Focus on a Long-Term Recovery Plan
Financial pressure can be tough, but it is important to think about the long-term. You can make small changes, such as raising rent, refinancing, cutting costs, or building better relationships with your tenants to help regain stability.
By taking action now, you can address your mortgage issues and set yourself up for a better future. Remember, this is just a difficult time – with the right approach, you will come out stronger.
Conclusion
If you feel stressed, just take a deep breath. Landlords facing mortgage problems have options to consider. You can renegotiate your mortgage terms or sell your property to regain control over your finances. Don’t let stress take over you. By taking action, you can improve your financial situation and achieve stability.
Remember, you are not alone. Whether you require help with rental changes, reducing costs, or even managing debt, there is support available. With proper guidance, you can effectively manage your property investments and protect your assets for the future.
