There has been an increase in the number of ‘reluctant landlords’ taking out landlord insurance in the private rental sector. Both the lack of borrowing and demand has meant homeowners have been forced to let their properties because of the lack of buyers.
Research by ARLA (Association of Residential Letting) showed that 34% of member offices saw an increase in the number of rental properties coming onto the market because they were not sold during the third quarter of 2010. This is an increase from 19% in the second quarter of this year.
Ian Potter, operations manager at ARLA, said “The rise of the reluctant landlord seems to reflect wider market uncertainty and instability.
“There is a dearth in available property either to rent or buy, yet people are holding back from selling, perhaps strategically, to secure the best price; or more likely because they simply can’t find a suitable buyer. While we welcome new landlords to the market, this trend is not without risks.
“Letting a property can be full of potential hazards, especially for inexperienced landlords – from material issues, such as a tenant mistreating a property, to financial problems, such as landlord inability to meet mortgage payments. A qualified, licensed agent can help guide both landlord and tenant through the process, to ensure neither party is left out of pocket.”
Reluctant landlords will get Tax concessions for using the energy saving allowance scheme and by making a rental property more energy efficient it can help them find a tenant. Tips include installing energy-saving light bulbs, checking the loft insulation is at its most energy efficient, check cavity wall and floor insulation, which is important. Make sure both are properly insulated to stop any heat escaping. Fit lagging to hot water pipes and tanks and look for, and fix, any drafts.
With the rising cost of gas and electricity, a tenant will want a property that is cheaper to heat.