Like it or not, the private rental sector is booming. The rental market has almost doubled in size in the last decade, and according to research from the campaign group Generation Rent, renters will outnumber homeowners in 104 of the UK’s 650 parliamentary constituencies by the year 2021.
Demand is high and rental yields are comfortably higher than bank interest rates – and these factors combined with an increase in availability of buy-to-let mortgages in recent years has bred a new generation: a generation of first time landlords.
Rise of the accidental landlord
In fact, central London was found to have the highest proportion of accidental landlords at 31% according to new research from The National Landlords Association. The survey asked landlords why they first entered the buy-to-let market and found that 11% were by chance such as inheriting property, 5% acquired an extra property such as when they met a spouse or partner, 5% intended to sell a property but experienced difficulties and 3% had to relocate for work, either home or abroad.
“The figures show that there are a significant number of people who find themselves as landlords without ever having really planned to enter the market,” said Carolyn Uphill, NLA chairman.
“It may be surprising to find that so many (first time) single property landlords struggle to make it work, but we often find that this is because so many simple don’t realise what they’re getting themselves into.”
An emotional attachment to property
We recently conducted a survey across our network of 12 Portico offices, and found that nearly 60% of our landlords actually originally lived in the property that they now rent out.
When we asked this group what was most important to them, when renting out their property, only a minority chose rental price achieved. The vast majority told us that finding good tenants who would look after the property as well as they had, was the most important factor.
Making the step from accidental to professional landlord
At Portico we have a dedicated paralegal department who operate independently of our front offices and who run our “due diligence” process on potential tenants. They are forensic in their approach, running credit checks, checking bank statements and assembling a set of meaningful and properly verified references. Only when they are totally happy that a tenant’s credentials are satisfactory, will they approve the tenancy.
We have also launched a rent guarantee product and complimentary maintenance service between tenancies, so if you are landlord, accidental or otherwise, why not give us a call on 0207 099 4000?