08 May What is a “Relucant Landlord”? …
The ‘reluctant landlord’ – a phenomenon that emerged during the recession as homeowners were forced to let their property rather than sell it – has returned to the rental market, according to the Association of Residential Letting Agents (ARLA).
ARLA’s research revealed that 34 per cent of member offices in Q3 2010 have seen an increase in the number of rental properties coming onto market because they can’t be sold. This figure was an increase from 19 per cent in Q2 of this year.
There was variation across the UK in the number of agents reporting this trend, with 58 per cent of agents in the North East of England reporting an increase in reluctant landlords, compared to 15 per cent in Central London.
The number of reluctant landlords peaked during the recession when at the beginning of 2009, some 94 per cent of agents surveyed reported an increase of property coming onto the rental market because it could not be sold.
Ian Potter, operations manager at ARLA, said: “The rise of the reluctant landlord seems to reflect wider market uncertainty and instability. There is a dearth in available property either to rent or buy, yet people are holding back from selling, perhaps strategically, to secure the best price; or more likely because they simply can’t find a suitable buyer.
While we welcome new landlords to the market, this trend is not without risks. Letting a property can be full of potential hazards, especially for inexperienced landlords – from material issues, such as a tenant mistreating a property, to financial problems, such as landlord inability to meet mortgage payments. A qualified, licensed agent can help guide both landlord and tenant through the process, to ensure neither party is left out of pocket.”
Sarah Cassidy at estate and lettings agent Place agreed saying: “The private rental market often runs in a counter cyclical fashion to the sales market and the current difficulties in obtaining high loan to value mortgages is driving even more people towards renting rather than buying.
At Place we have an excellent mix of sales and rentals are therefore able to advise clients effectively as to all of the options available to them.