Skip to content

Active landlords in the UK may sit tight in 2012 says ARLA

It shows that the number of landlords that sold a property in the last 12 months increased from 6% to 8% in the fourth quarter of 2011. The number of landlords saying they had bought properties also rose, from 23% to 25% over the same period.

These figures suggest that landlords focused on reshaping their property portfolios during the year, said ARLA.

Landlords in the North West of England were particularly active, with 31% of respondents buying at least one property during the year, and 11% sold at least one.

In contrast the number saying they expect to acquire further properties in the next 12 months dropped slightly, from 27% to 25%, while the number saying they expect to sell rose from 8% to 9%.

Landlords have been steadily decreasing the percentage they are borrowing on each property. This could reflect the continuing lack of mortgage finance or be a reflection of the drop in property prices in some parts of the country.

The current average loan to value of 46% represents the lowest seen since the second quarter of 2007, when landlords reported an average of 60%.

‘PRS forecasts have stated that the rental sector will still offer growth in the coming year. Rental growth will remain robust across all sectors, albeit at a more sustainable level of around 4% to 5% for this year.
This will come about in part because of the continued inactivity in the sales market but nothing like the growth we have seen for the past two years. But the PRS still represents substantial value for investors looking to enter the market or increase their participation,’ said Tim Hyatt, president of ARLA.

Ian Potter, ARLA Operations Manager, said that the statistics indicate that landlords changed their property portfolios throughout last year, in some cases expanding portfolios despite gloomy economic climate.

‘However, our research also suggests that into 2012 this situation might change, which could be a sign for concern. A healthy PRS is crucial in providing choice and flexibility for consumers across the housing market in 2012 and, ultimately, helping to provide more homes for more people,’ he explained.

‘We would urge anyone planning to let out additional properties, or a property for the first time, to do plenty of research and consult with. It is vital to ensure your investment is properly protected. Using a regulated ARLA agent will mean you have access to Client Money Protection and a redress scheme, as well as advice on selecting the right property at the right price,’ he added.