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New landlords are using rental income to provide for their retirement

New landlords are using rental income to provide for their retirement

A high proportion of struggling residential property owners are copying the practices of successful portfolio landlords and choosing to offer their properties for rental purposes in the UK private rental sector (PRS) in order to provide adequate finances for their retirement.

Of the struggling property owners choosing to offer property to rent for the first time and existing portfolio landlords who responded to the BM Solutions/ BDRC Continental survey:

  • 84% view their rental property as a supplementary income to their pension
  • 60%of landlords actively plan to live off the rental income either before or at retirement.
  • 40% agree that their property is their pension and intend to make a decision dependent on the state of the property market once they reach retirement age.
  • Very few landlords plan to sell all properties in their portfolio when they reach retirement

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Landlords advised to seek student tenants

Landlords advised to seek student tenants

The Association of Residential Letting Agents (ARLA) has issued advice on the UK student lettings market to first time landlords.

UK Landlords should look to the student lettings market in order to get their empty properties rented out, according to ARLA.

With over 600,000 students starting university courses in major UK cities this September, the student lettings market is a thriving business sector.

UK landlords who are used to renting to working tenants and securing the rent with Rent Guarantee insurance may be wary of entering the student rental market but ARLA insist that the student rental market is a thriving business concern.

ARLA has issued advice on the best steps to take when renting to students that is invaluable information, especially for new or first time landlords.

Guidance for landlords includes ensuring students understand their obligations as tenants, (even when they are likely to be away from the property during long university holidays), joint or several liability clauses, in case students leave the property unexpectedly and conducting a comprehensive inventory, as students don’t always have the best reputation for looking after properties.

Specialist UK Landlord and Letting Agent service providers, Legal 4 Landlords, also urge new or inexperienced landlords to seek advice from a reputable property managing agent, with a proven track record in successful HMO and student lets, before entering the student lettings market and advise landlords to enquire with the relevant local authorities about licensing and compliance with any local legal requirements.

Reluctant landlords making the wrong choices when it comes to insurance

Don't be Confused Over Landlord Insurance

An increasing number of private residential properties are being rented out to tenants because the owners have moved out but found it difficult to sell the property on the open market. The rise in “reluctant” or “accidental” landlords has caused ripples of concern within the UK lettings industry.

In fact, according to the Association of Residential Letting Agents (ARLA), increasing numbers of property vendors are either forced into or choosing to rent out homes they cannot sell in order to avoid financial ruin, in fact 47% of ARLA members experienced movement of this nature in the final quarter of 2011.

ARLA operations manager, Ian Potter said: “Renting a property on a short term basis can be a good option for anyone who has found a buyer for their home, but who have not found the right property to buy themselves. The approach would also suit individuals considering a move to a new area who would like to test the water before committing to anything final”.

Many UK property owners are facing this position as the UK property sales market remains sluggish despite the recent rally in property prices due to the end of the stamp duty holiday. However many property owners are getting it wrong when it comes to getting the right sort of insurance cover.

Property vendors move out of the property and on to pastures new but are unable to sell the property and attempt to get it rented out in order to reduce their financial burden. In doing so new landlords often decide to cut corners and attempt to save money in the wrong areas in a bid to reduce their financial stress, with potentially disastrous consequences if they decide to scrimp on insurance costs and don’t choose specialist landlord insurance, but they only discover that they are not covered when the worst has already happened, compounding their misery.

Legal 4 Landlords spokesman Sim Sekhon said: “When renting out property there are factors that many people don’t take into consideration and even take for granted, such as insurance or making sure the rent will be paid on time, every time. New landlords need to educate themselves on their responsibilities, the demands and expectations of tenants in the current rental market as well as complying with government and safety legislation. It can be a tough world for the inexperienced but the specialist products and services offered by Legal 4 Landlords enable landlords and letting agents to protect their rental assets, including landlord and Buy to let insurance”.

Landlords are advised to check that they have the correct insurance cover for their rental properties and it may also be a requirement of the mortgage company to provide a copy of the policy document.

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