New entrants into the buy-to-let (BTL) market are being reminded by the National Association of Residential Letting Agents to do their due diligence.
The YouGov SixthSense Buy-to-let: Landlords and Mortgages report reveals the BTL market has shifted from long-term investors to more novice players.
The report states three distinct profiles have emerged: Investors, Reluctant Landlords and Good Parents. Investors remain the predominant type of landlord with around three quarters of all landlords being motivated by investment. But the report reveals more than half of new landlords view their buy-to-let property as a short-term investment. Reluctant Landlords are homeowners forced to rent out their property because they’ve had difficulty selling. Nearly a third of landlords who entered the market in 2012 did so reluctantly with at least one of the properties they owned. Good Parents have moved into the BTL market by the need to offer financial support or provide a financial legacy for their children. This group makes up more than a quarter of the market.
Susan Fitz-Gibbon, president of ARLA said: “The economic downturn has brought new entrants to the BTL 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 done their research and fully understand that there are risks and responsibilities associated with the role.”
“It is important to have realistic expectations of what returns you are likely to receive from your property; it is also important to remember the significant responsibility in adhering to regulatory requirements.”
If you are a new landlord, Rocket Lawyer UK have Quick Guides to help you to understand what the responsibilities of landlords and tenants are. We offer tenancy agreements, an inventory and notices to end tenancies in our suite of property documents