18 March 2009

Sarah Beeny defines the "unplandlord"


Gumtree.com has released their 2009 first quarter rental index which reveals dramatic new statistics on so-called "unplandlords". Sarah Beeny defines an unplanlord as someone who chooses to rent their house because they can't sell it for a figure that they are willing or need to accept. This increase is mirrored by a 19% hike in new rental properties advertised on Gumtree since the last quarter rental index . The surge in rentals across the UK backs up the fact that‘unplandlords’ are not in the profession out of choice.

"Nearly a quarter (23%) of all landlords questioned admit they are renting out because they wanted to move but couldn’t shift their property for what they felt it was worth, and a massive 81% claim they did not want to become one in the first place," according to Gumtree's research.
This situation poses a new problem as nearly a third of UK properties are now being managed by individuals who are "worryingly unaware of the processes involved in being a landlord". Gumtree's research provides worrying new statistics on UK landlords many of whom:
  • did not get a legally required gas safety certificate (46%)
  • did not install a smoke alarm (47%)
  • did not request references from tenants (54%)
  • failed to draft an inventory (64%)
Ms. Beeny recommends unplandlords checking with the Association of Residential Lettings Agents (ARLA) for advice on drawing up contracts and other necessary tidbits. However the ARLA is also aware that over 76% of estate agents have moved into lettings as a result of the market in the last six months. Most of these agents are not "meeting the required standards for lettings agents" according to the Association.
"In order to make the transition from an estate agent to a lettings agent, they need to have studied more than a hundred different pieces of legislation, and pass minimum competency tests to ensure their ability to advise clients to the required standards." according to the ARLA.

2 comments:

HIP Consultant said...

I like the term 'unplandlord', quite appropriate and made me smile. However, some of the stats you quote are quite concerning.

Richard Stabile Bergen County Real Estate said...

The point that most unplanlords must understand is, single unit properties are a poor way to invest your money. The cap rate can be as low as 3% or even flat. If there is equity in the property, the notion of hanging on is not always the best use of capital. If someone owns their own business, they can get a lot more return using their money in their business than as a single family home or condo landlord.