RLA News Service

There can be no dispute that it is becoming increasingly difficult for home owners to sell their homes in today’s uncertain market. According to property valuation agency, Hometrack’s latest index, properties are now taking on average more than 15 weeks to sell, last year the average time on the market was just 9 weeks. Sellers are also only achieving around 93% of their original asking price.

Therefore with the market seemingly stalled in many areas, it is not surprising that many people who need to move are now considering renting out their homes rather than slashing their asking price.
The stagnant housing market has meant that frustrated vendors have been essentially forced in to renting out their homes, while trying to buy elsewhere.
The Co-Operative bank has suggested that at least a fifth of its recent buy to let business has come from accidental landlords.

There are of course drawbacks to renting out a property instead of selling and therefore it will not be the best strategy for everyone. Tim Hyatt, president of the Association of Residential Lettings Agents (ARLA), said “lettings is an unregulated industry and there can be pitfalls for both tenants and landlords, including loss of monies. Therefore it is vital that every landlord, reluctant or keen, seeks expert advice”.

David Hollingworth, director at mortgage broker London and Country, warns “you must tell your mortgage lender before renting out your home”. Accidental landlords are being stung with more expensive ‘let to buy’ mortgages as lenders take advantage of desperate sellers unable to move.
All banks have different policies; some lenders will allow their borrowers to stay on their current residential mortgage deal for as long as it lasts. This means their repayments will be much cheaper than if they were a professional landlord.

Source: www.mortgagerates.co.uk