Five Questions About: Becoming a landlord

Click to follow
The Independent Online

How much rent can I expect?

Nearly a third of landlords have increased rents during the first quarter of the year, in response to "significant tenant demand" for property, according to buy-to-let lender Paragon. The Association of Residential Letting Agents (ARLA) says the average rental return in the UK hovers around the 10 per cent mark.

Will the residential rental market grow?

At present, almost one in every six homes is rented. However, almost six in 10 ARLA offices believe that demand for rental property will outstrip supply this year, causing more landlords to enter the market.

What are the pitfalls?

You shouldn't become a landlord unless you have sufficient savings to cover any periods when you don't have tenants. You will also need to factor in the cost of any repairs, as you and not the tenant are responsible for the maintenance of the property. Know your legal rights and make sure you thoroughly check any potential tenants' references to avoid getting stuck with someone who doesn't pay their rent on time.

How easy is it to get a buy-to-let mortgage?

There are 325 buy-to-let mortgage products on the market at the moment. A spokesperson for the Council of Mortgage Lenders said: "Despite tight criteria for buy-to-let mortgages, with current average minimum deposits at 25 per cent and minimum rental cover at 125 per cent, the volume of new lending increased every quarter in 2010."

What are the best buy-to-let mortgage rates available?

One of the best buy-to-let rates available is from Paragon Mortgages. It's offering landlords a two-year variable mortgage for 3.3 per cent, with a £2,000 arrangement fee. However, to secure that rate, you'll need a deposit of at least 35 per cent.

Looking for credit card or current account deals? Search here