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UK landlords look to sell rental properties

Industry experts are warning that many landlords in the United Kingdom will sell up to two thirds of their rental properties within the next several years, due to more costly buy-to-let mortgage rates and less attractive conditions, as well as a slump in housing prices. As we reported earlier, rental rates in some parts of Britain—most notably in London—are starting to fall back from recent record highs. According to a Bloomberg report, Nick Poyntz-Wright of money-management giant Skandia UK estimates that less attractive mortgage rates and falling property values will convince some to steer clear of the buy-to-let market, while others who already own properties may consider leaving this business.

Housing prices in the UK have been declining by dramatic proportions this year. In fact, the current drop in prices and residential property values is the steepest since 2002. Mortgage lender HBOS Plc, for example, now predicts that Britain’s housing prices will drop by another 20 percent between now and the end of 2009. As landlords decide to sell their rental properties, the mortgage market in the UK will also be transformed, since buy-to-let mortgage arrangements currently comprise approximately 10 percent of all mortgages. Skandia points out that the proportion of buy-to-let loans to all other mortgages may fall back to rates closer to what they were a decade ago, when these accounted for only one percent of all such arrangements. This trend, however, may ultimately have negative implications for tenants who in the recent past have become accustomed to a better selection of rental properties owned by private landlords.

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RLA

RLA

The Residential Landlords Association (RLA) represents the interests of landlords in the private rented sector (PRS) across England and Wales. With over 23,000 subscribing members, and an additional 16,000 registered guests who engage regularly with the association, we are the leading voice of private landlords. Combined, they manage almost half a million properties.

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