With banks not wanting to offer finance for mortgages, and homeowners wanting to move but not sell in the current climate, the rental market is becoming the market of choice when talking of housing.
People of course don't want to sell their house for a loss, so they look to rent out their property over the short term, until they feel they are able to sell. With the current economic outlook, is ‘short term' realistic? It could easily turn out that achieving real capital growth will need to be thought more as ‘long term'?
What all this of course means is that potential landlords really need to be well prepared before jumping in at the deep end in the rental market. They would need to ask themselves:
- 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 letting agent or try and manage the tenancy myself?
- Do I need a written tenancy agreement?
- Does my property comply with any gas and fire safety requirements?
- How do I provide an energy performance certificate?
- How do I protect my tenant's deposit?
This is of course before the tenant has even moved in!
Simon Gordon, Head of Communications for the National Landlords Association, commenting on the rise of the ‘reluctant landlord', said: "Becoming a landlord in this market is not for the faint-hearted. New landlords, especially those who hadn't planned on starting a lettings business, must make themselves aware of the rules and regulations so they can operate their tenancies successfully.
"The private-rented sector provides accommodation for almost three million households and there is a major risk that inexperienced landlords, although well-meaning, are not fully up-to-speed with their responsibilities and problems can arise. The ultimate responsibility for operating the tenancy lies with the landlord and, although a good letting agent is worth their weight in gold, ‘reluctant landlords' are obliged to be on top of their game.
"If landlords are not properly prepared, the potential long-term wait for prices to come back up may prove to be a Pandora's Box for the private-rented sector."
So, do we have any ‘reluctant landlords' out there?
