Recent reports that buy-to-let landlords are leaving the market in droves have been reinforced with the news of specialist of buy-to-let lender, Magellan, closing its doors to new business.
Impending pressure from the government to tackle landlords and letting agents who, in their words, 'potentially discriminate' against some tenants, including those in receipt of benefits, has taken its toll. That, together with the squeeze on any return on investment in rental property, has made many reconsider their venture into the sector.
The general disarray caused by Universal Credit, where housing benefit is no longer paid direct to landlords but to the client, is just one named culprit. It has provoked reluctance on the part of some residential buy-to-let owners and their agents to rent to those in receipt of such payments. Denying potential housing benefit tenants the right to rent is justifiably seen as flouting equality laws - even though many landlords have resorted to these draconian measures only after finding themselves out of pocket due to DSS tenants not paying their rent.
Add to this, the government's Right to Rent scheme that
The property market in general and the buy-to-let market in particular is confused, and no wonder. Conflicting reports abound and scare stories do not stimulate confidence in the sector.
We believe, and always have, that property is a long term, slow burn investment that will reap rewards in due course – it is not for short-term quick return investors.
Our advice is to engage a good letting agent to guide you on how to maximise the potential rental income your asset might attract, and then to capitalise on that by introducing reliable tenants who will look after your investment.