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Tough 2010 predicted for private rental market

Tough 2010 predicted for private rental market

Category: Mortgages

Updated: 11/12/2009
First Published: 11/12/2009

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Landlords have been warned that they can expect 2010 to be even tougher than 2009, although it is hoped that lending availability will begin to increase.

The Association of Residential Letting Agents (ARLA) has told members that there is a danger that demand will outstrip supply in the next 12 months, as a number of reluctant landlords leave the market.

"As demand rises, in particular due to a lack of social housing, there will be mounting pressure on the sector to provide good quality rental properties," commented Ian Potter, operations manager at ARLA.

The body also warned that rising unemployment could put pressure on landlords, as their tenants struggled to pay rent. There is also a danger that landlords could default on their mortgage repayments, putting their tenants at risk of eviction.

"Mortgage defaulting is a problem that will not go away in a hurry, and we have long emphasised the importance of careful selection of both tenants and landlords to ARLA members, as well as the implementation of contracts and agreements," said Mr. Potter.

However, there is a chance that a new year will bring new opportunities to the private rental sector, as the whole property market continues to stabilise. Historically low prices combined with greater availability of credit should enable timely investors to purchase property for the buy-to-let market, said ARLA.

"There has been little commitment from the Government thus far on economic measures to help the wider industry meet property demand, but increasing demand should have a positive effect on the private rental sector, creating opportunities for new and existing investors and driving standards up," commented Mr. Potter.

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