Prospective landlords urged to research first
Posted: 13 Sep 2006 09:59:49 GMT
People thinking about investing in property to let are being advised to research the market carefully before making a purchase.
A new report by consumer group Which? claims that it is vital that potential landlords do their homework before "leaping into letting".
The organisation has released an essential guide on the issue, entitled Renting and Letting, and claims that, although purchasing property can be a sound investment, would-be landlords must weigh up the pros and cons.
Buy-to-let property has become increasingly popular, with total UK borrowing setting records during the first six months of 2006, with loans advanced to landlords of £17.5 billion over the half year.
Which? suggests that in certain circumstances prospective landlords could be better off putting money in the bank, though property generally offers a decent return and increases in value.
Kate Faulkner, author of Renting and Letting, commented: "Budding property entrepreneurs should remember there are lots of ways of investing, and buying property can be risky. You must be sure at the outset that buying to let will give you better returns than putting your money in the bank for the same period of time."
The guide advises thinking of buy-to-let property in terms of running a business, with rent needing to exceed purchase and maintenance costs by around 25-30 per cent.
Experts claim that this year marks the tenth anniversary of the buy-to-let investment concept, following the launch of a landmark scheme led by the Association of Residential Letting Agents in September 1996, intended to boost the UK rental market and open it to a wider range of investors.