Guest Post - Accidental Landlords – not by design, but thriving nonetheless
The return of the ‘accidental landlords’ is something that’s gained plenty of column inches within property publications over the past 18 months. But while many of us can relate to those whose hands have been forced into the rental market as a result of current market conditions, making sense of what this means on a larger scale remains unclear.
As the average time a property spends on the market before sale continuing to increase, it’s no surprise that many homeowners are choosing to rent rather than sell when moving into a new home.
Figures from Rightmove recently highlighted how the average time on the market for property, had flown through the three-figure barrier, hitting an unprecedented 105 days during 2012. Despite the initial success of the help-to-buy scheme, first-time buyers’ woes on entering the property ladder have continued – something that’s played no small part in the rise of accidental landlords.
Although while many of those forced into the rental market have done so out of circumstance as opposed to choice, the booming rental sector has ensured many accidental landlords have reaped the rewards.
Unsurprisingly, this has inspired many to turn their accidental presence within the market into a more permanent one. Rightmove’s first quarter Rental Market Forecast highlighted that the increasing rental yields had paid such dividends for accidental landlords, that 69% were looking to hold onto their rental property, with a further 16% looking to begin building a portfolio.
Yet although prolonging their stay in the rental market has the potential to unlock undoubted financial gains, accidental landlords’ lack of experience in maintaining homes doesn’t necessarily spell great news for the market.
Accidental entry into the rental market can see many new landlords unprepared for the tasks that await them. From insurance and inventories to deposit protection and even HMO licensing, the demands of a landlord in 2013 ensure that property rental needs to be thought of as much more than a side-project. A failure to adequately prepare for tenants can lead to potentially devastating financial consequences later on down the road for new landlords.
For those looking to make a temporary foray into property rental a more permanent one, it’s vital that new landlords take the time to research the requirements needed to successfully fulfil their new obligations and that they have the time needed to do so.
Although the outlook for a wider recovery in the UK property market is positive, recovery remains slow and with the rental sector continuing to produce such impressive yields, it’s no surprise that landlords of all varieties are enjoying boom time.
Yet for those new to the sector, it’s crucial that their new found duties are given the time and care they deserve to protect tenants, their home as well as their future yields from the property. With accidental landlords now becoming an increasingly permanent part of the rental market’s proverbial furniture, the manner in which they manage their tenancies is now set to come under continued scrutiny – watch this space.
Author Bio:
This guest post was provided by Total Landlord Insurance (Hamilton Fraser) who have been specialising in providing comprehensive landlord insurance since 1996 – they also provide helpful advice for both landlords and tenants on their blog.
Cites:
Source 1: Right Move Consumer Rental Forecast 2013 Q1 http://www.rightmove.co.uk/news/files/2013/02/Rightmove-Rental-Market-Forecast-February-2013-Q1-CCS1.pdf
Source 2: Telegraph Article into the ‘return of Accidental Landlords’