Recession postpones landlord expansion plans
Landlords are likely to adopt a more cautious approach to their expansion plans now that the UK has slipped back into recession, says Landlord Assist.
The tenant eviction and rent collection firm said that many investors may put off their expansion plans for the time being until the economy showed signs of recovery.
He said: "Current market conditions may appear perfect for landlords with record tenant demand and a shortage of accommodation available. However if the last recession taught landlords anything it is that economic uncertainty also increases the likelihood of rent arrears and tenants defaulting on payments.
"As a result whilst some landlords will look at the long term picture and won't want to miss out on the opportunity to secure property purchases that represent real value for money, we expect others to be mindful of the possibility of rent arrears and bide their time until there are genuine signs of economic growth."
Meanwhile Graham Kinnear, managing director at Landlord Assist, said property investors were also looking for more stability from their mortgage lenders until they committed to their expansion plans.
He said: "Although a double-dip recession may fuel further growth in the Buy-to-let sector as prospective home owners choose to rent instead of buy, at the moment some landlords are nervous about extending their portfolios as they are getting very mixed messages from their banks.
"Some of the banks appear to be increasing their standard variable rates even though the Bank of England base rate remains at 0.5%.
"Landlords want economic stability and clarity of lending criteria before they will expand their portfolios further."
- What made the nationals: Sponsored by Presschoice
- Strong new business results for Bright Grey and Scottish Provident
- CML: Repossessions stable and arrears falling
- Buy-to-let lending down but increases market share
- UK interest rates held at 0.5pc
- Dragonfly had £337m AIPs at start of 2012
- Steve Simpson joins Keystone Buy to Let Mortgages
- FSA internally divided
- BSA 2012: FCA to operate guilty till proven innocent judgements
- BSA 2012: Wheatley: Business will be more difficult under twin peaks
- Ray Boulger: A quiet month from the MPC
- Year-on-year growth is good for buy-to-let
Have Your Say