The National Landlords Association has published guidelines for homeowners who are considering letting out their home as an alternative to selling.
David Salusbury, chairman of the NLA, says that if house prices fall this year, there are likely to be growing numbers of homeowners choosing to let out their properties rather than sell while they wait for the market to stabilise.
He says: “There are currently a record number of people searching for rental properties, meaning would-be landlords would have no problem finding a tenant.
“Letting a property can be a rewarding experience and an effective way of providing additional income, but prospective landlords will need to remember they are effectively starting a small business.
“They must ensure they are well aware of the rules and regulations governing the letting of private residential accommodation.”
The NLA is advising potential landlords to provide a proper tenancy agreement, protect the tenant’s deposit with a government-authorised scheme, create an inventory for the property, take out comprehensive landlord insurance and ensure urgent repairs are fixed promptly.
Meanwhile Assetz is warning property investors to be selective about the areas in which they buy in 2012.
The firm says that areas which are reliant on manufacturing or the public sector, and are therefore more susceptible to high levels of unemployment, are likely to see falls in value of 5% or more this year.
Stuart Law, chief executive of Assetz, says: “Now is not the time to take a punt on potentially ‘up and coming’ locations, or those that are dependent on sectors which are at risk from high levels of unemployment.
“The deepening eurozone crisis is far from over and it will no doubt continue to impact the property market here in the UK by limiting the amount banks are able to lend and stifling consumer confidence.”
But he adds that overall the buy-to-let market is expected to remain strong this year, and that those who buy in a good location will see reliable rental income and a good supply of quality tenants.