Buy to let investors set for a good year

A well known online letting agency is forecasting a good year for property investors but warning them to get ample landlord insurance as they forecast rents will rise but so will rent arrears.

Upad were one of the first online letting agents in the UK and have seen their business grow massively in the last couple of years. There cut price fees have seen landlords rush to use online advertising as opposed to traditional methods, and at a time when tenants are crying out for good accommodation, Upad founder James Davis predicts 2012 will be a great year for residential landlords across the country. He explained: “There are a number of things we predict to arise in the UK Buy-to-Let market in 2012, namely that we will see first time buyers struggling to get on the ladder even with a deposit as banks will require an ‘uber’ credit rating, despite lending at 6%+.

“In addition, we also estimate that interest rates will stay at around 0.5% then fall lower by Q3 while the not unlikely collapse of the EU in Q2 will force banks to shut up shop as they won’t have cash reserves to lend. However, on the flip side, most landlords do have cash reserves, pensions, savings and equity in the homes they have access to, and falling house prices next year will mean that those with cash will be able to snap up good deals from distressed sellers.”

Other experts in the sector broadly agree with Davis although most believe London will once again outstrip the rest of the country when it comes to higher rental achievements. Almost all experts anticipate rental arrears will soar as tenants lose their jobs or find cuts in housing benefit leave them unable to find their rent which will mean landlords will rely more and more on information available when they select tenants for their properties.