ARLA predicts rise in buy-to-let repossessions

Permalink: ARLA predicts rise in buy-to-let repossessions
by Gill Montia

The Association of Residential Lettings Agents (ARLA) is forecasting a tough year ahead for buy-to-let landlords.

The body expects a rise in the number of landlords defaulting on their mortgage payments accompanied by an increase in the rate of repossessions in the sector.

While new measures come into force today offering additional support to homeowners struggling with their mortgages, buy-to-let landlords are excluded from the assistance, leading ARLA to predict that tenants will be at greater risk of homelessness into 2009.

However, ARLA is hopeful that a revival of the buy-to-let market will be evident by the end of 2010 and operations manager, Ian Potter, believes that falling house prices will entice back landlords who have exited the market.

Mr Potter adds that further falls in interest rates on savings accounts should convince investors that bricks and mortar are still the most solid long-term investment.

He is also hopeful that so called “forced landlords”, that is homeowners who have let properties because they have been unable to sell, will be encouraged by their rental returns and see the benefits of buying to let.

With regard to rental returns, Mr Potter expects these to continue to be patchy in 2009 and advises those wanting to enter the lettings market in the New Year to identify areas where a property can be let out easily.

These include locations with high employment and a large proportion of people looking for short-term rents, such as the university towns.