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Accidental landlords on the rise

publication date: Nov 23, 2012
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Novice landlords are growing in number as the gloomy economy – and divorce takes its toll, say experts. Research by the National Landlords Association (NLA) has shown that 43 of its members did not buy the first property they let out with the intention of becoming a landlord. 
Scott Hendry at Auction FinanceScott Hendry at Auction Finance Limited, the specialist lender says there are five top reasons for people becoming an ‘accidental landlord’: 
Inheritance – families who inherit a property and need to let it in the short term. 
Divorce – going through a divorce in a recession can often mean the family home can’t be sold for the price wanted. Renting it out brings in cashflow and enables couples to go their separate ways. 
Children – unplanned pregnancy or multiple births can mean more space is needed quickly! Renting out the existing home is often quicker than selling. 
Student property – holding on to a highly rentable student property bought for offspring after they have graduated is a common way people start their life as a landlord.
Economy – the state of the property market means that many people are in negative equity and don’t wish to sell their home so they prefer to rent it out. 
Scott said, “There has been a huge increase in the number of accidental landlords during the past five years and accidental landlords often expand their portfolio when they realise that letting a property can be profitable and hassle-free. It even causes a career change for many people. If you can leverage a mortgage on an unexpected property you can quickly build a portfolio. High rental yields are currently achievable even though house prices are falling in some areas.”