Not every landlord is one by choice. Those who find themselves letting their property out of necessity, rather than choice, are known as accidental landlords.
<p style="text-align:center;"> <img title="Infographic: Accidental Landlord Statistics" src="https://www.ashburnham-insurance.co.uk/wordpress/media/accidental-landlords-infographic.png" alt="Infographic: Accidental Landlord Statistics" /> Infographic by <a title="Ashburnham Insurance Services" href="https://www.ashburnham-insurance.co.uk">Ashburnham Insurance</a></p>
The Tenancy Deposit Scheme defines an accidental landlord as
“A homeowner who is letting their property due to circumstance rather than having actively pursued buying a property to let it out.”
According to a survey by the National Landlords’ Association (NLA Quarterly Landlords Panel Research, Q4 2014), 1 in 4 private sector landlords have entered the private renting sector unintentionally as a result of their circumstance. That’s equates to roughly 360,000 accidental landlords.
- 11% of all landlords inherited the property – entering the market “by chance”.
- 5% of all landlords unintentionally acquired an “extra property” – e.g. when moving in with their partner.
- 5% of all landlords “intended to sell but experienced difficulties”.
- 3% of all landlords let their property when they “had to relocate for work, either home or abroad” – on a short-term or long-term basis.
With rents on the rise, many homeowners are finding that they can afford to wait to sell. Especially when they’re struggling to find a buyer for their home, they may decide to rent it out instead.
Countrywide Research has found that 1 in 12 homes (approximately 80,000 properties) that came onto the rental market in 2017 had been for sale within the previous 6 months. This indicates a struggle to sell, before the decision was made to let. Some regions within the UK see a higher number of accidental landlords. For example, 12.5% of London homes on the rental market were previously up for sale; whereas, in Scotland, this figure is a lot lower at only 5.6%.
Homeowners who only intend on letting the property short-term usually ask their mortgage lender for a Consent to Let. This allows them to maintain their current mortgage for a maximum of 12 months while they rent it out. This decision may be due to the current state of the market, where it makes financial sense to hold off on the sale of the property. If the property owner then decides that they would like to continue letting the property, they may go on to trade in their residential mortgage for a buy-to-let one.
However, accidental landlords are less likely to stay in the rental market long-term. The typical accident landlord rents out their home for an average of 15 months, compared to the regular buy-to-let investor who will own the rental property for an average of 17 years.
89% of accidental landlords re-list their property for sale once the original tenant has moved out.
As an accidental landlord, you may not be so clued up as to the nuances and legalities of letting property, including your responsibilities as a landlord, tenants’ rights, the right to rent check, and more. HMRC are also cracking down on accidental landlords when it comes to common tax errors, with their “undeclared income” campaigns you may have seen on posters and billboards around the country. If you’re new to the private rented sector, it is critical that you read up on everything you need to know as an accidental landlord. It’s not quite as simple as collecting rent each month.
Get a great deal on landlord insurance with Ashburnham! We can provide you with a quote online or via our freephone, covering everything from the building and contents to public liability.