The new breed of ‘reluctant landlords’ poses a major risk to the health of the British rentals market says a new report.
New research from the National Landlords Association (www.landlords.org.uk) notes that the number of new ‘reluctant landlords’ – those who can’t sell, so put their homes up for rent too – instructions has grown at the fastest pace since records began.
56% more surveyors reported a rise in new instructions and the growth was significantly stronger for houses than flats, says the report. The glut of new landlords, many letting out their properties to avoid selling at a loss, enter the lettings business with some reluctance, hoping it will only be for the short-term, adds the study.
However it goes on to day that given the current economic outlook, ‘it is possible these ‘reluctant landlords’ might have to rent for longer periods to see decent capital growth.’
Before renting, potential landlords need to be prepared, says the NLA. There are serious issues that if not investigated, could leave landlords in trouble.
Rookie new entrants should consider the following:
* Do I have permission from my bank or building society to let out my property?
* Does my current insurance cover letting out the property?
* Do I need permission from my freeholder?
* Do I use a reputable lettings agent, or manage the tenancy myself?
* Do I need a written tenancy agreement?
* Does my property comply with gas and fire safety requirements?
* How do I provide an energy performance certificate?
* How do I protect my tenant’s deposit?
‘The private rented sector provides accommodation for nearly three million households and there is a major risk that inexperienced landlords, although well-meaning, are not fully up to speed with their responsibilities,’ says Simon Gordon from the NLA.
He points out that the ultimate responsibility lies with the landlord. ‘Although a good lettings agent is worth his weight in gold, ‘reluctant landlords’ are obliged to be on top of their game.’