by Calculated Risk on 1/23/2009 04:20:00 PM

I've joked about "accidental landlords" before, and how these owners are just more shadow housing inventory.

Here is a UK story from the Financial Times: ‘Accidental landlords’ face shrinking rents

Letting agents saw a rush of so-called “accidental landlords” into the market last year, as falling house prices convinced property vendors to delay their sales. But the sheer volume of properties that have become available to potential tenants in recent months has brought stiff competition for landlords and put pressure on rents.
...
Many landlords have had to slash rents by around 20 per cent, according to agents. In the most oversupplied parts of London, falls in rental income have been as sharp as 30 per cent.

Ouch.

In the U.S. if an owner decides to rent, the mortgage rate doesn't change (although many areas have a property tax exemption for homeowners that no longer applies). But in the UK:

Homeowners who let their property are obliged to tell their lender and may have to move on to a more expensive buy-to-let mortgage.

Falling rents, more vacancies, and a higher mortgage payment - and falling property values - the joys of the accidental landlord. They probably would have been better off just selling at a loss.