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'The future's bright' for the long-term landlord

28th August 2009 | back to article listings BACK    print this article PRINT

There are many uncertainties in the property market, but one thing that remains constant - regardless of the economic climate - is the simple piece of advice given to all those investing for buy-to-let purposes: Be in for the long haul. All too often the ill-advised will snap up a home expecting to make a quick buck before finding themselves disappointed and out of pocket. This is likely to have been the case particularly over the last couple of years, as values have sharply declined.

However, shrewd investors with long-term goals in mind will not have been put off by the trend and may in fact have taken the opportunity to build their portfolio for the future. And they could now be set to see those choices pay off as Mark Garner, managing director at LettingZone, has suggested that prospects are good for the long-term landlord.

Despite expressing concern over the fact that rental arrears are up and employment levels are expected to continue falling, he explained that "the future looks very good".

"Most professional landlords who have been in it for years will be on tracker mortgages, so therefore they will be reaping the full benefit of the lower base rate and their cash flow business will be very healthy at the moment," said Mr Garner. "Obviously at some point … interest rates will go up, so landlords need to take measures to protect themselves in the future from that, but rates will probably stay low for another year yet."

He was commenting following the release of a study by LSL Property Services, which showed that typical rents in England and Wales rose by 0.5 per cent last month. The July figures represent the fastest monthly increase in a year, while the number of tenants in arrears dropped - as did the percentage of unpaid rent.

Further good news for landlords came with the finding that the number of days the typical property stays empty for has declined. Currently standing at 26.7, Mr Garner suggested that it improves the overall picture for those in the buy-to-let sector, as void periods are the "killer" in terms of returns on investment and must be minimised.

He concluded by observing that although rents are by no means soaring, he has seen his own stabilise and this appears to be the case across the country as a whole, resulting in a bright future for investors.

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