landlord rent guarantee – UK sees rise in reluctant landlords in private rented sector

landlord rent guarantee

The latest research from the Association of Residential Lettings

Agents (ARLA) indicates that 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 ‘reluctant

landlords’.

During the third quarter of 2011, some 47% of ARLA member agents

surveyed reported a rise in the number of ‘unplanned’ lettings as

home owners turn to the PRS 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

reporting an increase in rental property coming onto the market

because it cannot 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 at 17%. According to ARLA, this means some

homeowners will be turning landlord for the first time, many

reluctantly.

‘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,’ said ARLA president Tim Hyatt.

‘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,’ he

explained.

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 points out that anyone letting a property for the first time

must notify their mortgage and insurance providers as they may

need to amend the terms of both if changing the use of a home to

a rental property.

It also advises people to conduct thorough research, or better,

seek professional advice, about your local rental market to

ensure you’re setting the rent a competitive but also realistic

level and to 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. This means

taking photographic evidence throughout and ensuring that the

final documentation is jointly approved by you as the landlord,

and your tenant.

Also people need to remember that the property is no longer their

home, it’s someone else’s home and this needs to be taken into

account when making decisions regarding the decoration and

furnishing in the property as not everyone will have the same

taste.

It is worth consider enlisting a managing agent as they will be

able to help you find and vet tenants, arrange documentation, and

manage the property and if you do decide to use a letting and/or

management agent, always use a regulated agent (such as an ARLA

member) 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.

Source:

http://www.propertywire.com/news/europe/uk-landlords-rental-prope

rty-201201115975.html

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