Propertychecklists managing director Kate Faulkner highlighted that landlords could be creating serious issues for themselves as they seek to chase yields outside their usual geographical or property areas.
Speaking on Shawbrook Bank’s Future Outlook of Buy-to-Let webinar, Faulkner noted that some landlords were too inexperienced or unaware of local conditions to pursue this strategy.
“We are starting to see some landlords chase yields and there could be issues coming,” she said.
“For example they might try to put HMOs (houses in multiple occupation) where it’s just not appropriate.”
Local knowledge vital
Faulkner warned that “landlords need more local knowledge” when venturing into new regions or cities, adding brokers should be there to advise them of these risks.
She also explained that while certain areas may see good yield or good capital growth, achieving both was much trickier – and, for example, some pockets had seen no capital gains for several years.
However, Faulkner also believed that, despite rumours of a potential increase to stamp duty for additional homes, the government would stop targeting landlords.
“I think in the next year or so the tirade against landlords is probably going to end,” she said.