Helen Griffin Booth, Managing Director of Bluerow Lettings said:
“In the last year we’ve seen lots of accidental landlords coming onto the market because they just can’t find a buyer for their home.”
Bluerow’s findings are backed by national statistics, with figures from the National Landlords Association (NLA). These figures show that members who had been forced into letting because they could not sell a property had risen from five percent to 7 percent.
The NLA statistics are supported by figures from the Co-operative Bank last week, which showed that a fifth of its recent buy-to-let business was from accidental landlords.
Helen said:
"Stricter lending, economic uncertainties and high house prices is continuing to dampen the demand to buy houses. As a result we’ve lots of homeowners who are buying new homes looking to let out their current property and wait until the market improves. This makes sounds business sense. In the current market homeowners often have to slash house prices to sell them on, but if they don’t need the funds tied up in the home it makes much more sense to let the property out. The rental market is booming at the moment, profits can be made, and houses can become excellent long-term investments.”
There are pitfalls with renting out, Helen advises. Lenders are becoming more wary of accidental landlords, who represent a greater risk than ordinary buy to let investors.
Helen said:
“Things have toughened up in the buy to let market. Some lenders will force you to change your mortgage if you are letting out your former residence and some will not allow you to do so, meaning that you will need to find another deal.”
However despite the red tape, Helen advises that it’s worth the effort because the financial gain will be worth it.
She said:
“While the banks have got tougher on homeowners letting out former residences, many will still give consent on your existing mortgage or offer a good rate on a buy to let mortgage and the effort will definitely be worth it. Homeowners are not struggling to let out property, demand is high, rental values are strong and homeowners can find they have an excellent long-term investment which they are making a profit out of every month and could be worth a lot more in a few years.”
She added:
“Obviously the downside of letting out is managing and finding the tenants, but homeowners can use a firm like ourselves, which deal with all those issues and take much of the risk and hassle out of being a landlord. So for a small amount of effort homeowners can turn a former residence into an investment which will pay serious dividends in the future.”
