Reluctant landlords fear a 'double dip recession'

A predicted double dip slump in the UK housing market could result in a tidal wave of homeowners reluctantly renting out their property and downsizing in a bid to seek a financially viable way of holding on to their home.

According to research by More Than Business, ten per cent of UK homeowners say that another housing market slump would leave them no choice but to rent out their property and downsize.

The primary reason that would be reluctant landlords are citing is the desire to hold on to their property until the market recovers.

Many fear repossession if they cannot keep up with mortgage repayments and with interest rates expected to rise, tracker mortgage rates may increase rapidly, leaving many homeowners in financial difficulty.

Mike Bowman, head of More Than Business, said: "With three-quarters of homeowners not having adequate knowledge of the legal responsibilities involved in being a landlord, we would urge people to carefully plan their actions and not make any rushed decisions."

Last month, Andrew Goodwin, economic advisor to Ernst & Young ITEM Club, said that there is only a 20 per cent chance of the UK economy slipping into a second recession.

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2010-09-17 13:29:03 © Moneyextra.com