Buy-to-let landlords 'could struggle' if demand drops

Some buy-to-let landlords will struggle to cover their mortgage payments with the rent they receive from tenants if supply increases and rent prices drop, according to one Scottish estate agent.

Brian Adair, executive chairman of Ryden Lettings, told the Sunday Herald: "If you can do basic arithmetic, you can work out that the buy-to-let sums simply don't add up for many people."

He added that the lower end of the market is safer where people expect to pay between £400 and £700, but with regards to the more expensive rental properties, he said, tenant demand could be badly affected.

Many of the tenants at the high end, who pay as much as £3,000 a month, tend to be employed in finance, so if the banking crisis results in the loss of jobs in that area, high prices will have to come down.

Despite these worries, a survey by market research firm BDRC revealed that 14 per cent of landlords are now feeling positive about the commercial market compared to ten per cent one year ago.

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