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Accidental Landlords leaving PRS

Monday, 2nd June, 2014

The number of accidental landlords in the UK private rented sector (PRS) is falling, according to ARLA.

These individuals, who are also known as reluctant landlords, are homeowners who have been forced to let their property due to being unable to sell, and have accounted for a significant proportion of rental property owners in the years since the financial crisis. 

However, ARLA has found the improving housing market means such landlords are becoming less common.

The organisation's latest quarterly report revealed the number of letting agents who have seen property entering the PRS because it cannot be sold fell to 13%. This is the fourth quarter in a row the number has dropped as it makes its way down from the high of 94% recorded at the peak of the financial crisis in 2009.

Ian Potter, ARLA managing director, stated: "The resurgence of property prices and buyer demand in many areas is reducing the number of so called accidental landlords."

"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," he added.

ARLA's report revealed the majority of landlords investing in the PRS are now doing so with an eye on the long term. It said the average time between the purchase and sale of a rental property currently stands at 19.8 years, up from 16.4 years in 2009.

The organisation also found 45% of landlords let a property with a view to earning a combined yield from rental income and capital appreciation. A further 37% said they want to have a nest egg to secure their long-term financial future.

Mr Potter advised landlords that whatever motivation they have for investing in a rental home they should seek the help of a registered letting agent to ensure the property is managed properly.


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