Rosy days ahead for landlords?

December 30, 2011

Landlords Insurance

As the old year draws to a close and a new one beckons, the newspapers and airwaves are full of discussion relating to the background economy and what is increasingly being referred to as, the lost decade.

 

Of course, few people are likely to be totally immune to this and that certainly applies to the average landlord.

 

Yet out of this, come some distinctly mixed messages for the landlords sector.

 

There appears to be some evidence that the economic squeeze will continue to make some people reluctant to enter the private ownership housing marketplace and encourage others to leave it, opting back into rentals.  In theory, this may significantly increase demand for private rented accommodation – something that should be good for the rental industry.

 

This may be exacerbated, though for less positive reasons, by the controversial news that the government intends to push ahead strongly and encourage yet more right-to-buy activities by offering various forms of incentives etc. That may reduce the stock of public rental property available.

 

On the downside, there now appears to be a general consensus that family and individual incomes are likely to decline in real terms over the next several years ahead.  Putting people’s budgets under downward pressure may well result in additional challenges for some tenants, who may struggle to meet their rental commitments.

 

Although speaking for landlords en-masse is always risky, it may be safe to assume that none will welcome what may be a greater tendency to encounter rental arrears and tenant viability issues.

 

Although you may find a buy to let insurance quote that offers a contribution towards a loss of rental income in the event of an insured risk becoming reality (such as a flood that makes your property uninhabitable until repairs are carried out), typically it may not be easy to find financial help when tenants are drifting further into arrears due to the background economic situation.

 

It remains to be seen whether or not this overall projected position leads to the rather odd prospect of seeing a combined increase in demand and downward pressure on rent, at the same time.

 

Although some people are predicting relatively rosy days ahead for the rentals marketplace, this may be a little premature and a hostage to fortune in terms of the background economy and its struggles.

 

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