Accidental landlords exit the market
Friday, August 21, 2009 by Douglas And Gordon
- Rental stock has diminished as accidental landlords withdraw from the market
- People who have rented their property for the last year see now as a good time to sell
- As a result rents are stabilizing
- Reduced rental stock means tenants are being more competitive for the best properties
The large supply of rental stock in London has diminished significantly in the last three months as accidental landlords leave the marketplace. Vendors who were battling to sell their property a year ago and succumbed to the accidental landlord syndrome have been encouraged by activity in the sales market and are selling their properties to get on with their lives. Many were unprepared for the challenges of being a landlord and, now that they are achieving improved sales offers, are ready and willing to extricate themselves from the rental marketplace.
This has led to a normalisation of available stock to historic levels and a stabilisation in rents which have seen falls of around 15% to 20% between the last quarter of 2008 and Q2 2009. Less stock means tenants are becoming more competitive for the best properties - a more positive sign for the remaining, more seasoned, landlords. The buy to let market is significantly more active now, with landlords taking a long term view on capital growth, and as rental yields start to rise slowly once again from a low base.
Ed Mead, sales director, Douglas & Gordon, says 10% of current new instructions are from former accidental landlords. “Many homeowners have found that being a temporary landlord is not worth the hassle and are marketing their properties now they are within the last thirty days of their tenancy. They have done well to wait a year and the majority will get more now than they would have a year ago. For the last 4 months we have been operating at half the stock and double the number of registered buyers, which means that vendors are four times more likely to get their property sold than this time last year."
Virginia Skillbeck, lettings manager of Douglas & Gordon adds: “Accidental landlords never wanted to let their property in the first place, so they will no longer have the bother of maintenance issues, expensive void periods and looking for new tenants. The exodus will help reduce the oversupply of rental property in London, and tenants will no longer be in such a strong position to negotiate low rents or favourable terms as the supply of good property dries up."