Most landlords enquiring about payment holidays are not struggling to pay their bills, buy-to-let broker Mortgages for Business reports.

The firm says that only a handful of the landlords calling its switchboard about payment holidays have legitimate concerns about covering their costs.

Many already have sufficient cash reserves to make up any shortfall should their tenants miss payments.

The brokerage says that aside from the moral implications of making use of this emergency measure when it is not required, many landlords do not realise that it could negatively affect their mortgage prospects in the future.

It warns that some lenders are cancelling pipeline mortgage applications if the borrower requests a payment holiday on one of their existing loans.

Lenders are also likely to ask landlords to prove that they are in hardship before granting a payment deferral.

Mortgages for Business managing director Steve Olejnik says: “We are having a lot of discussions with landlords around payment holiday requests.  “Only a handful of them are raising legitimate concerns about how to pay their mortgage in the face of the covid-19 pandemic.

“Landlords must be aware that any requests could potentially damage any approaches to that lender.  

“Lenders expect landlords to be able to cover void periods under normal circumstances – where a property is empty, and a landlord is not getting any rent – so they will not take kindly to landlords trying to take advantage of them just to build up some cash reserves.  

“One borrower with three live cases with their lender approached them for repayment holidays on another, existing loan.  

“The lender immediately cancelled all three.  

“Smart landlords, who want to capitalise on short-term house price falls and expand their portfolios when the lockdown is lifted, should think long and hard before approaching their lender.

“Don’t jump on the repayment holiday bandwagon.

Any deferred payments will have to be made at some stage and it could create problems down the line – especially when you come to refinance.”