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Double dip could delay investors expansion plans

  • 09/05/2012
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Double dip could delay investors expansion plans
A report by Landlord Assist suggests that landlords are likely to delay plans to expand after the UK fell back into recession.

Landlords will become increasingly cautious after enjoying favourable market conditions over the past 18 months, said the firm, and investors who previously expanded property portfolios will slow plans for expansion.

Despite tenant demand currently exceeding supply, Landlord Assist’s commercial director Stephen Parry said: “Current market conditions may appear perfect for landlords with record tenant demand and a shortage of accommodation available. However, if the last recession taught landlords anything it is that economic uncertainty also increases the likelihood of rent arrears and tenants defaulting on payments.

“As a result, whilst some landlords will look at the long term picture and won’t want to miss out on the opportunity to secure property purchases that represent real value for money, we expect others to be mindful of the possibility of rent arrears and bide their time until there are genuine signs of economic growth.”

However Ying Tan, managing director at The Buy to Let Business, said that current market conditions should help maintain growth in the rental market, and that landlords will continue to invest as long as demand remains high.

“Obviously the word recession can damage confidence by itself. But if we look at the mechanics of the market, the recession may mean first time buyers decide not to buy.

“They are more likely to rent which will increase demand and will continue to make landlords expand their property holdings. The recession will drive rentals up and encourage landlords to expand if they can access suitable finance.”

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