There has been a rise of 7% in the number of Association of Residential Letting Agents (ARLA) members reporting unplanned lettings during the third quarter of 2011. This increase is due to homeowners turning to the private rented sector, as they are unable to sell their property, or hope for a higher price in the future. The figure is now at 47%, from 40% at the start of the year.
Homeowners Turning to the Private Rental Sector
ARLA also stated that the trend is particularly noticeable in the North East and North West, 67% and 62% respectively. A higher proportion of respondents indicated that the rise in these areas is due to rental properties coming into the market because they cannot be sold.
Within Scotland, Wales and Northern Ireland, more than 60% of member agents found an increase. The figure was lowest, at 17%, in Central London.
Ian Potter, ARLA’s Operations Manager, explains: “The rise in this figure suggests that homeowners struggling to sell their homes due to the sluggish market are increasingly looking to the private rented sector to utilise their property in the short term.
“It’s likely that many of these reluctant landlords will be attracted by the flexibility of a short-term let. Renting a home on a shorter basis can be a good option for anyone who has found a buyer for their home, but not found the right property to buy themselves. Equally, for anyone testing a new area before committing to move there, or working away from home for short periods, renting can offer more stability and home comforts than a hotel.”
This means that some homeowners will be turning landlord for the first time, many unwillingly, according to ARLA.
ARLA President, Tim Hyatt, states the benefits: “Letting a property is an excellent way of generating consistent income from your property, if the correct approach is adopted by prospective landlords.
“However, lettings is an unregulated industry and there can be pitfalls for both landlord and tenant, including loss of monies. While we are, of course, happy to see an increase in the number of landlords, it is vital that every landlord, reluctant or keen, seeks expert advice before embarking on a rental agreement.
In particular, we would advise anyone considering renting or letting a property, to consult a licensed ARLA member. Licensed agents have to adhere to a strict code of conduct, and must have a number of consumer protection mechanisms in place, meaning that if things do go wrong, there is a way to see redress.”2
The most likely types of house to be brought to the rental market by these landlords are detached and semi-detached homes, with studio flats being the least likely, according to ARLA agents.