Buy-to-let conditions could remain difficult in 2010

By the end of this year, approximately 150,000 tenant evictions will have gone before the courts, and with the economic downturn showing no signs of lifting, Landlord Assist has forecast another tricky year for the rental market as it attempts to stabilise.

With unemployment numbers showing no signs of abating, rental arrears will continue to be the main problem facing landlords. Combine this with uncertainty over interest rates, which will impact loan repayments and other financial commitments, it seems landlords will continue to be hit hard over the next 12 months.

Graham Kinnear, MD of Landlord Assist, said: "While more people have turned to rented accomodation in 2009, a rise in unemployment has meant that more tenants have struggled to meet their monthly commitments. This has had a knock-on effect on some landlords, who have already seen the value of their assets decrease.

"Landlords are less equipped to sustain non paying tenants than they were a year ago and need to take precautionary measures to minimise the risk of being exposed to rent arrears.”

But whilst challenging times remain on the horizon for landlords, some optimisim can be seen in the potential increase in rental yields, which has been driven by a drop in rental stock.

Stephen Parry of Landlord Assist, commented: “Over the past year, the market has been characterised by an oversupply of properties caused by a rise in so-called ‘accidental landlords’ who opted to rent out their properties instead of selling them at a loss.

“However, this has since tailed off as evidence of improvement in the housing market has encouraged some owners to try their hand again at selling up. This reduction in supply is likely to lead to upwards pressure on rents in popular areas.”

According to property website, rents rose by 0.1 per cent in October to an average of £830 a month, the sixth month of stable or rising prices. However, rents are on average still 3.8 per cent lower than a year ago.