Home Owners Forced Into Let To Buy Loans November 30th, 2010
The slow rate of recovery in the UK economy and uncertainty over the near future, has put many potential home buyers off the idea of taking out a home owner loan and buying a property. Despite this, there are still plenty of people who are in a position to move house, but are unable to sell their existing house.
As a result of this, many potential movers are being forced to keep their existing home, taking out a let to buy loan and renting their current home, in order to avoid losing the house they want.
The news comes from the Association of Residential Letting Agents (ARLA) who say that they have seen a significant increase in what have become known as “reluctant landlords”. Over the course of the three months to the end of September this year, ARLA members saw an increase in privately rented properties of around 34 per cent.
Although this idea can work well for individuals as long as they have a suitable tenant and the rent is sufficient to cover the cost of the existing home owner loan, there can of course, be problems and if a reluctant landlord suffers a void in the tenancy, they could be left having to pay for two large loans, their main home owner loan or mortgage, as well as their let to buy loan.
Ian Potter of ARLA said “While home owners forced to let out their home can reap significant benefits by holding on to their property, becoming a landlord for the first time can be a stressful experience.”
“Successful letting isn’t simply about finding a tenant, signing a contract and handing over the keys. There are important steps every landlord should take when letting out a property that was once their home.”