10 March 2010
Ongoing Property Problems
Any property‘s value is a function of its rental income. Rental income is dictated by the market’s ability to pay. Citywire’s Natalie Holt recently reported that “The Association of Residential Letting Agents has reported that over half of its members have seen a rise in tenants who are struggling to pay their rents. The latest survey from ARLA, which collates data from 733 letting agents and information from lenders Mortgage Express and Paragon Mortgages, shows that 55% of members in Q4 reported that tenants are having trouble making rent….
Ian Potter, operations manager at ARLA, says that if unemployment rises this year it is inevitable that the number of tenants forced to default on their rent will also go up accordingly.-
The problem of rental arrears will therefore persist and potentially grow in seriousness as tenants get caught in a web of debt.”
Tenants missing their rent have the knock-on effect of a threat of eviction and landlords defaulting on their mortgage repayments.
This has to be bad news for the UK property market but good news for investors in the Two Season UK Property Owner Protestor Fund which we’ve long recommended as a way to ether profit from the falling UK property market or insure the falling value of UK property assets.