Fed up with waiting for your house to sell? Chances are, you’re probably considering postponing a sale and becoming a temporary landlord instead, according to Countrywide.
What’s the latest?
'Accidental' landlords have added 80,000 homes to the rental market after struggling to sell their properties, and deciding against waiting to make a sale.
One in every 12 homes that was put up for rent in 2017 had been on the market in the previous six months, according to letting agency Countrywide.
The group said it was the third consecutive year in which the number of accidental landlords had increased.
Johnny Morris, research director at Countrywide, said: “While most landlords are in the business by choice, the last three years have seen an increase in the numbers letting out a property they had previously tried to sell.
"With mortgage rates remaining low, these discretional sellers can afford to let their home, while they wait and see what the future holds for the sales market."
Why is this happening?
The slowdown in the housing market has led to a rise in the number of people struggling to sell their home.
But at the same time, low interest rates make it economical for them to let their property instead.
Some homeowners may also be postponing a sale in the hope that house price inflation picks up again and they can get a higher price for their house.
Who does it affect?
While the increase in the supply of rental homes helps prospective tenants, there is a downside as well.
Accidental landlords tend to stay in the rental sector for a much shorter time than traditional landlords.
The average buy-to-let investor owns their property for 17 years, but accidental landlords typically rent their home out for just 15 months.
Sounds interesting. What’s the background?
London has the most accidental landlords, with these accounting for 12.5% of all homes to let that had previously been listed for sale in 2017, the highest figure since Countrywide’s records began in 2007.
Numbers are also high in the north east and north west at 9.1% and 8.8% respectively.
But the number of people forced to rent out their home after being unable to sell it are much lower in other areas of the country, where the property market is more buoyant.
But despite the rise in the number of accidental landlords, a shortage of properties available to let meant rents have continued to rise.
The cost of being a tenant increased by 1.2% across the country as a whole in the year to the end of November, to average £958 a month.
The Midlands and the north saw the biggest increases at 2.8% and 2.3% respectively, while rents edged ahead by just 0.4% in London and 0.8% in the south east.
Top 3 takeaways
- Accidental landlords have added 80,000 homes to the rental market as they struggle to sell their properties
- One in every 12 homes that was put up for rent in 2017 had been for sale in the previous six months
- It is the third consecutive year in which the number of accidental landlords had increased
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