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31st January 2012

"Reluctant Landlord" Numbers Continue To Grow

The number of homes coming onto the rental market because they cannot be sold is increasing in some parts of the UK, causing a rise in the number of so-called "reluctant landlords."

 

Research from the Association of Residential Lettings Agents reveals that during Q3 2011, nearly half (47%) of ARLA member agents surveyed reported a rise in the number of "unplanned" lettings as homeowners turn to the private rented sector because they are unable to sell their property, or holding off until a higher price is achievable.

 

This figure has risen from 40% at the beginning of the year.

In England, this trend was noticeable in the North East and North West in particular, where higher proportions of respondents reported an increase in rental property coming onto the market because it could not be sold (67% and 62% respectively).

More than 60% of members in Scotland, Wales and Northern Ireland also noted an increase. In contrast, the figure was lowest in Central London (17%).

 

According to ARLA, this means some homeowners will be turning landlord for the first time, many reluctantly.

ARLA President Tim Hyatt said: "Letting a property is an excellent way of generating consistent income from your property, if the correct approach is adopted by prospective landlords.

 

"However, lettings is an unregulated industry and there can be pitfalls for both landlord and tenant, including loss of monies. While we are, of course, happy to see an increase in the number of landlords, it is vital that every landlord - reluctant or keen - seeks expert advice before embarking on a rental arrangement.

 

"In particular, we would advise anyone considering renting or letting a property, to consult a licensed ARLA member. Licensed agents have to adhere to a strict code of conduct, and must have a number of consumer protection mechanisms in place, meaning that if things do go wrong, there is a way to seek redress."

 

ARLA agents report that the most likely types of home to be brought to market by a reluctant landlord are detached and semi-detached houses, while least likely are studio flats.

 

ARLA has the following top five tips for anyone letting a property for the first time:

 

* Notify your mortgage and insurance providers as you may need to amend the terms of both if you are changing the use of your home to a rental property;

* Conduct thorough research, or better, seek professional advice, about your local rental market to ensure you're setting the rent at a competitive but also realistic level;

* Put together a detailed inventory that includes the condition of features and fittings of the property as well as its contents, making a clear note of any wear and tear. Ensure the final documentation is jointly approved by you as the landlord, and your tenant;

* Remember that the property is no longer your home - it's someone else's home. Bear this in mind when making decisions regarding the decoration and furnishing in the property as not everyone will have the same taste as you;

* Consider enlisting a managing agent. They will be able to help you find and vet tenants, arrange documentation and manage the property.

 

If you do decide to use a letting and/or management agent, always use a regulated agent (Martin & Co Walton on Thames is a member of the National Approved Letting Scheme - NALS) to ensure client money protection. This will secure both your money, and that of your tenants' and will give access to a redress scheme should it be required.