The end of accidental landlords?
Category: Buy To Let
There was once a time when people would become "accidental landlords" simply because they were unable to sell their home. Rather than lose out altogether they'd reluctantly put their property up for rent instead, and during the credit crunch a large number of people became landlords for this very reason.
However, according to research from the Association of Residential Letting Agents (ARLA) it looks like this phenomenon could become a thing of the past, with the housing market revival ensuring people don't need to enter into the life of a landlord against their wishes.
Their latest quarterly report found that the percentage of letting agents seeing an increase in properties coming onto the rental market because they couldn't be sold has fallen to 13%, a figure which not only represents the fourth quarterly drop but also a significant fall from the high of 94% recorded in 2009, when the post-credit crunch property crisis was in full swing.
Arguably, this has been driven by the recovery of the housing market, with ramped up buyer demand and ever-rising house prices meaning most people will have no problem selling their homes – so accidental landlordship is no longer a necessary alternative.
Of course, that's not to say that the buy-to-let arena can't be lucrative. A lot of people still actively choose to make the transition to landlordship, either as a sideline or a sole form of income, with the ARLA survey also finding that a lot of landlords view their rental properties as long-term investments.
Ian Potter, managing director of ARLA, said: "The resurgence of property prices and buyer demand in many areas is reducing the number of so-called accidental landlords. Despite the reduction of landlords in this situation, wider investment in rental properties remains strong across the market. The shape of the private rented sector is changing once again, with long-term landlords returning to the fore."
The figures show that just 1.5% of respondents had become landlords to make a short-term capital gain over less than five years, with the majority (45%) seeking to benefit from both rental income and capital appreciation while 37% had done so to create a nest egg for their future.
Given that it still offers such a viable form of investment over the long-term, it makes sense to maximise your returns by finding the best buy-to-let mortgage that you can. The cheaper your monthly repayments the higher your overall profit will be, and whether you're an accidental landlord or a professional one, it's all about the profit.