Landlords expect buy to let portfolio values to increase

Landlords are predicting that their buy to let property portfolios will increase in net value over the next 12 months and landlords are taking advantage of weak house prices to buy property.

The positive prediction of a net increase in their buy to let property portfolios is the first time this has been seen in over 2 years.

As Paragon Mortgages research shows the increase is on average expected to be less than 1%.

With 93% of landlords reporting that they do not expect to sell any properties in the last quarter of the year and 14% intending to buy more buy to let property, maybe there is evidence that landlords feel that house price falls have bottomed out?

This would be great news. There are though still issues to recognise and overcome in the buy to let market.

As John Heron, Paragon Mortgages’ managing director, says ‘landlords may well be frustrated in their attempts to buy because of a shortage of buy-to-let finance.

There are only two lenders making any levels of buy-to-let finance available at present because of the continuing dysfunction in the money market.

It is vital to the longer term health of the private rented sector that the Government considers this specialist market as well as the more politically attractive owner-occupied sector.’

As a landlord, there may also be frustrations with tenants as more and more suffer financial difficulties as a result of the recession, perhaps becoming unemployed, and find it impossible to keep up with their rental payments.

Landlords need to seriously consider getting rent guarantee insurance to protect themselves against such a situation.

As a landlord it is also important to make thorough tenant reference checks prior to agreeing tenancy agreements.

There are a growing number of instances where rented property is being used by people to grow drugs, cannibis in particular, in rented properties.

Cannibis factories can often be a fire hazard due to the poor electrical wiring done and the heat required to grow the plants.

So having the best landlords insurance to cover this and other issues is also seriously worth considering.