Residential Lettings Comment: Accidental landlords are on the rise14th July 2012

The number of homeowners letting out properties that they can't sell, in order to move on, is on the increase says North West Lettings firms Bluerow.
 
Helen Griffin Booth, Managing Director of Bluerow Lettings said: “In the past year we’ve seen lots of accidental landlords coming onto the market because they can’t find a buyer for their home.”
 
The National Landlords Association (NLA) says that the number of members who had been forced into letting because they could not sell a property had risen from five per cent to 7 percent.
 
Recent figures from the Co-operative Bank, showed that a fifth of its recent buy-to-let business was from accidental landlords.
 
Helen Griffin Booth 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 good 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 that are tied up in the property, it makes 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.”
 
However, lenders are becoming more wary of accidental landlords, who represent a greater risk than ordinary buy-to-let investors. 
 
“The buy to-let-market has toughened up considerably. 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.”
 
“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.”