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'Reluctant landlords' make a comeback

01 November 2010
Written by rosalind renshaw

The ‘reluctant landlord’ – a phenomenon that emerged during the recession as home owners were forced to let their property rather than sell it – has returned to the rental market, according to ARLA.
 
ARLA’s research revealed that 34% of member offices in the third quarter of this year experienced an increase in the number of rental properties coming on to the market because they can’t be sold. This figure was an increase from 19% in Q2 of this year.
 
There was variation across the UK in the number of agents reporting this trend, with 58% of agents in the North-East reporting an increase in reluctant landlords, compared with 15% in central London.
 
The number of reluctant landlords peaked during the recession at the beginning of 2009, when 94% of agents surveyed reported an increase of property coming on to the rental market because it could not be sold.
 
Ian Potter, operations manager at ARLA, said: “The rise of the reluctant landlord seems to reflect wider market uncertainty and instability.”
 
To view the Q3 2010 ARLA Review and Index, visit: www.arla.co.uk/q3ri

Comments

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    Certainly those agents who got in early in the lettings field have been making a killing. However it is a little irresponsible to convince vendors to delay selling up and rent out in the hope of getting a better price, when that better price might (a la late80s-mid90s) take the best part of a decade to happen, and in the meantime saddle them with 3-4% yield (before insurance, voids and maintenance are considered. Far better to be straight and tell them to cut the price and get what they can for it now, as falls in most areas over the next 2-3 years are 100% inevitable. I know one landlord who tried to sell in 2007, rented out instead, and has just sold at 30% off his (admittedly high) asking price only this month losing him about £150k (the price he achieved was close to his 2002 buy price btw). He was paid around £40k rent in that time which didn't service his mortgage. Bad advice all round in this case.

    • 01 November 2010 10:22 AM
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    This is great news. It means we can look after the rental and when the market conditions allow we can sell on a sole agency basis and get a decent fee as well. Yippeeee

    • 01 November 2010 09:46 AM
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