Duncan Lewis

Romford Office

Crime and Civil cases

house 40 staff

Landlords want economic stability and clarity of lending criteria before they would expand their portfolios further.

Date: (10 May 2012)    |    

Total Comments: (0)    |    Add Comments

In the past 18 months landlords have been enjoying favourable market conditions with tenant demand exceeding supply and interest rates being at a record low level.
The mood was to capitalise on the positive market conditions by expanding their property investments.
But as UK has been technically declared to have slipped into recession the landlords were most likely to adopt a more cautious approach to their expansion plans the Landlord Assist, the nationwide tenant eviction and rent collection firm has said.
With the UK now falling back into recession, Stephen Parry Commercial Director at Landlord Assist said that many investors would be discouraged to expand at least for the time being until the economy again started some signs of recovery.
He said the current market conditions may appearing perfect for landlords with record tenant demand and a shortage of available accommodation. However, if the last recession was any indication to go by then the economic uncertainty also increases the likelihood of rent arrears and tenants defaulting on payments.
The result, some landlords look at the long term picture and won’t want to miss out on the opportunity to secure property purchases that represent real value for money. It is being expected that others would be mindful of the possibility of rent arrears and wait till there are genuine signs of economic growth.
Meanwhile Graham Kinnear, Managing Director at Landlord Assist says property investors were also looking for more stability from their mortgage lenders until they made any commitment to their expansion plans.
He said although a double-dip recession was fuelling further growth in the buy-to-let sector, as prospective home owners choose to rent instead of buy, at the moment some landlords were nervous about extending their investments as they were getting very confusion signals from their banks.
Some of the banks appear to be increasing their standard variable rates even though the Bank of England base rate remains at 0.5%.