Fifth of landlords new to buy-to-let sector
According to a study released by the BDRC Research Agency, one fifth of all residential landlords have less than two years of experience in the buy-to-let sector. But what might be surprising about these findings is that only a small minority of these landlords entered the rental sector because they were unable to sell their residential property due to the housing market crash. In fact, only 5 percent of these new landlords can be classified as “reluctant,” in that their inability to sell forced them to rent their home for a temporary period of time. Instead, most of these new landlords decided to enter the sector when they scooped up well-priced real estate through auctions, or after repossessions.
The BDRC study also found that nearly half of all residential landlords (49 percent) decided against increasing the rents they charge tenants and kept them at current levels. In contrast, 27 percent chose to augment rental rates, while 19 percent opted to decrease them, so as to avoid extended periods of vacancy.
The numbers also show that the recession has hit many landlords quite hard. For example, around 25 percent of landlords indicated that they had to contend with falling profits during the third quarter, while 8 percent noted that they experienced losses. The BDRC’s figures partially complement numbers released by the Association of Residential Letting Agents (Arla), which found that landlords now owned more properties than before. This trend, however, may be slowing down, especially as a growing chorus of economists see 2010 as a difficult year ahead.