Accidental landlords start selling a year after being forced into rental market by property downturn

Property rental prices in London are stabilising as ‘accidental’ landlords leave the marketplace and sell up, it is claimed.

Vendors who were struggling a year ago to sell their property in the downturn are now more able to sell ans the large  supply of rental stock in London has diminished significantly in the last three months, according to a report from Property Vision Rental Search.

‘Accidental landlords have been encouraged by activity in the sales market and are selling their properties to get on with their lives. Many were unprepared for the challenges of being a landlord and, now that they are achieving improved sales offers, are ready and willing to extricate themselves from the rental marketplace,’ explained Jo Bishop of PVRS.

This has led to a normalisation of available stock and a stabilisation in rents which have seen falls of around 15% to 20% between the last quarter of 2008 and the second quarter of 2009.

Bishop said that less stock means tenants are becoming more competitive for the best properties and this is a more positive sign for the remaining, more seasoned, landlords.

‘The buy to let market is significantly more active now with landlords taking a long term view on capital growth as rental yields start to rise slowly once again from a low base,’ she added.

Some 10% of new instructions are coming from accidental landlords according to Ed Mead, sales director of London letting agents Douglas & Gordon.  Many home owners have found that being a temporary landlord is not worth the hassle and are marketing their properties now they are within the last thirty days of their tenancy,’ he said.

‘They have done well to wait a year and the majority will get more now than they would have 12 months ago. For the last four months we have been operating at half the stock and double the number of registered buyers, which means that vendors are four times more likely to get their property sold than this time last year,’ added Mead.

According to lettings manager Virginia Skillbeck many accidental landlords never wanted to let their property in the first place. They are glad to forego the bother of maintenance issues, expensive void periods and looking for new tenants.

But she warned this change will affect tenants. ‘The exodus will help reduce the oversupply of rental property in London so tenants will no longer be in such a strong position to negotiate low rents or favourable terms as the supply of good property dries up,’ she said.

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