New investors overshadowing the traditional landlord
Published by Daniel Jones
Landlords in the UK are now seeking different kinds of returns on their investment as rising prices and the current level of demand means that more and more are hoping to capitalise in the short term rather than investing more smartly for the future.
This was the result of the latest report from the Association of Residential Letting Agents (ARLA), in its YouGov SixthSense Buy-to-let
: Landlords and Mortgages report, which indicated that the days of traditional landlords with the long term on their minds has made way for three groups of novice investors instead.
The first of these is the good parent - a group that will tend to purchase buy-to-let
homes as a way to offer some form of financial legacy and future for their children. These now account for 29 per cent of owners in the private rented sector.
The next group was the reluctant landlord - those who have let out their home because they simply could not find a buyer, but still wanted to move to a new house. According to ARLA, some 29 per cent of landlords who entered the market in 2012 did so because there was no way they could manage to sell the property in question.
And the final group ARLA mentioned was still by far the largest. Investors account for 76 per cent of all people in the market at the moment, but that does not mean there has not been a seismic shift in this particular demographic's behaviour either.
According to the report, 56 per cent of investors will look to buy with short term gain and low interest levels playing to their advantage rather than looking at a wider future.
Susan Fitz-Gibbon, president of ARLA, said: "The economic downturn has brought new entrants to the buy-to-let
market and has also had an impact on the way in which existing players invest. With more landlords entering the industry, less-experienced individuals need to ensure they have thoroughly researched and fully understand that there are risks and responsibilities associated with the role."
Published on: July 25, 2013
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