When the bottom fell out of the property market, a new profession was created: The Accidental Landlord. These landlords were often homeowners who suddenly had to rent out properties when they were unable to sell them. Once in the industry by ‘accident’, years of commitment have led them to become known as the ‘reluctant Landlord’, but new research by the Association of Residential Letting Agents (ARLA) signals that this position may be at an end.
The ARLA’s quarterly report reveals that the number of people letting out properties because they have been unable to sell them has dropped to a record low. Now the percentage of letting agents seeing an increase in rental property entering the market because it cannot be sold has fallen to just 13% from its record high of 94% in 2009.
Ian Potter, ARLA managing director, said: “The resurgence of property prices and buyer demand in many areas is reducing the number of so called accidental landlords.”
He added; “Despite the reduction of landlords in this situation, wider investment in rental properties remains strong across the market. The shape of the private rented sector is changing once again, with long term landlords returning to the fore.”
Now that homeowners are finding it easier to sell their properties, the landscape of the residential investment market is changing. The majority of landlords now seem to be treating property as a long-term investment, with the average time between purchase and sale sitting at almost 20 years! At the start of 2009 this figure was closer to 16 years.
Only 1.5% of landlords surveyed by the ARLA said that they had entered the profession to make a short-term capital gain. A massive 37% said they were working to create a ‘nest egg’ for their future, and 45% were working towards a combined, long-term yield from rent and capital appreciation.
With four successive quarters of decline in the number of reluctant landlords, it certainly seems like the professional landlord is back in charge, which can only mean good things for the market and the reputation of the industry.
If you are a landlord, it doesn’t matter why you entered the market – reluctance is not an excuse for not knowing your, and your tenants’, rights. We will always recommend that you treat your rental properties like a business and seek professional help and advice from reputable agents and associations.