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Double-dip recession forcing landlords to delay expansion plans

Subsequently many landlords have sought to capitalise on current market conditions by expanding their property portfolios.

However, with the UK now falling back into recession, Stephen Parry Commercial Director at Landlord Assist says that many investors may put off their expansion plans for the time being until the economy shows signs of recovery.

He says: “Current market conditions may appear perfect for landlords with record tenant demand and a shortage of accommodation available. However, if the last recession taught landlords anything it is that economic uncertainty also increases the likelihood of rent arrears and tenants defaulting on payments.

“As a result, whilst some landlords will 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, we expect others to be mindful of the possibility of rent arrears and bide their time until there are genuine signs of economic growth.”

Meanwhile Graham Kinnear, Managing Director at Landlord Assist says property investors are also looking for more stability from their mortgage lenders until they commit to their expansion plans.

He says: “Although a double-dip recession may fuel further growth in the buy-to-let sector, as prospective home owners choose to rent instead of buy, at the moment some landlords are nervous about extending their portfolios as they are getting very mixed messages 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%.

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

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2 thoughts on “Double-dip recession forcing landlords to delay expansion plans

  1. Rob Jebb says:

    I quite agree! We are waiting for stability from banks before increasing our portfolio. We are generally linked to LIBOR and are paying 3.75% over that. However that seems to go up everytime we discuss a new property! We are also being more careful when selecting our tenants, thoroughly checking landlord references, home visit and lifestyle reference. Also updating their CV has proved a good deterrent against default and does improve the tenant/landlord relationship.
    Landlords should take every possible check they can in this economic climate which shows no sign of coming to an end.

  2. Dislexic Landlord says:

    Ive stopped buying ive had a good run over the past 2 years rents are very good very few voids but the market has stopped

    I look for good proerty that fit my critirea normaly yeilding 10% but that bottom of the market has dried up

    Im a very fussy Landlord I know what I want and what I expect ??

    Im stayng out of the market until after September and if the property is there to buy I will purchase again

    I belive there is no rush When intrest rates do rise the Pooh will hit the Fan owners are now used to low intrest rates so when it rises there will be rich pickings again

    BTL is not s sprint it takes tme and thought

    Agents are trying to talk up the market I take very little notice

    We have a long way to go before the market returns to pre 2007 prices especialy out side the London Hot spot

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