Property News

Buy-to-let landlords urged not to "sin" - 16/05/2006

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An estate agent has urged landlords not to commit the "cardinal sin" in the buy-to-let market.

With burgeoning interest in the buy-to-let sector, the temptation of landlords is to "put all their eggs in one basket", which has been labelled by experts as a "cardinal sin".

This is when landlords develop the tendency to invest particularly in what they think they know best, hence leading to a homogenised portfolio.

Dan Atkinson, of London estate agents Atkinson Mcledod, told This is Money: "Too many landlords we deal with are too highly geared in one sector or area, which means they are extremely vulnerable if that sector or area takes a turn for the worse."

As a result, landlords have been urged to diversify and hence create balanced portfolios that cover a range of different sectors.

Although this can prove to be an expensive practice, the dividends can be sizeable, if a particular sector starts to surge.

Recent reports from the Western Mail suggest that Swansea, Colchester and Chelmsford as the top three buy-to-let hotspots outside of London.

It states that research from UCB Loans suggests affordable house prices and high student populations could raise rental yields.

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