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Caravan Uncertain year ahead for landlords

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Uncertain year ahead for landlords

2011 looks set to offer mixed fortunes for holders of landlord insurance with several sets of figures suggesting uncertain times ahead for the rental property market.

According to independent letting specialist, Leaders, the year got off to a strong start for lettings, with demand for quality rental accommodation at an all time high.

Caravan Uncertain year ahead for landlords – The company

The company, which has more than 40 branches in the south of England, said that January is traditionally a busy month for lettings, but in the first month of 2011 it saw a significant increase in people looking for somewhere to rent.

In fact, during the first three weeks of January, 15 percent more prospective tenants registered with the agency to find rented accommodation, compared to the same period last year.

The agency’s managing director, Paul Weller, said the rise was due to ideal market conditions for landlords,

with top-end rents being achieved in many areas, relatively cheap lending and strong demand from professional tenants, which shows no signs of abating.

Caravan Uncertain year ahead for landlords – letting for the first time

He went on to say that for those considering letting for the first time, or extending their portfolios, now is the perfect time to enter the market. There are some great opportunities for purchasing property and a better choice of buy to let mortgage products now available.

At the same time, for homeowners who would like to move but cannot sell, letting could be the ideal solution until the sales market improves.

Weller’s views are shared by estate agents Savills, which recently reported that 6% rise in average rents during the past 12 months has started to attract property investors back into the market.

It says the market now offers substantial opportunities, particularly for those with equity.

In its Spotlight on Residential Investment the company says the current lack of debt funding for large, complex development schemes has created the greatest opportunity for residential investment.

Caravan Uncertain year ahead for landlords taking advantage

Equity rich entrepreneurial property companies are taking advantage of this opportunity by either building schemes of sufficient scale to eventually sell on to institutional investors or teaming up in joint ventures with the institutions.

Jacqui Daly, director of Savills research, explained that the demand for rental property, both open market and intermediate will continue to increase; particularly as stock levels are likely to fall in the foreseeable future.

This we believe means the medium and longer term outlook for the rental market is broadly positive, with rental growth expected to exceed income growth over the next few years, she added.

Although the rental market may be buoyant, holders of landlord insurance are likely to face a number of challenges over the coming year.

Of prime concern is the ability of many tenants to keep up with their rent as government spending cuts begin to bite.

The housing charity Shelter has already warned that more tenants are borrowing on their credit cards to pay their rent.

It says over two million people have used credit cards to pay their mortgage or rent, a rise of almost 50% over the last year.

Campbell Robb, Shelter’s chief executive, said the charity’s research brings into sharp focus the daily struggle faced by millions of people across the country to keep a roof over their head.

He said this is a totally unsustainable situation and one which he fears could see thousands more families pushed into the spiral of debt, eviction or repossession and ultimately homelessness.

It’s vital that every single person using credit cards in this way takes action to get themselves out of debt and seeks urgent advice from organisations like Shelter, to ensure they don’t lose their home, he added.

Meanwhile eviction specialists Landlord Assist said landlords should take precautionary measures to protect their business interests.

The firm recommended careful tenant referencing and taking out landlord insurance against non-payment of rent.

Managing director Graham Kinnear said his organization was concerned that the problem will only worsen, especially as rents are expected to increase further this year.

This, combined with the VAT increase and Government spending cuts, the impact of which is likely to be felt hard over the coming months, will put tenants under increasing financial pressure, he concluded.

About the Author :- John Maitland has been in the insurance industry for 15 years. Specialising in caravan insurance, motorhome insurance, landlord lnsurance, travel insurance Uncertain year ahead for landlords.


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  • Posted On March 9, 2011
  • Published articles 283513

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