Home    Smaller buy-to-let landlords sell up 

What does the chart show?
That the number of landlords in the private rented sector has fallen to a seven-year low, with the number dropping by 223,000 over the past two years. 

Research by Hamptons International, an estate agent, found there were 2.66m landlords across Great Britain in 2019, down 8 per cent from its 2017 peak. 

The number of rented households was also down slightly on 2017, with 5,134,000 privately rented homes in 2019, though the total has grown sharply over the past decade: in 2009 there were 3,476,000 rented homes. 

Where have the landlords gone? 
The government and regulators sought to damp rapid growth in the sector in the middle years of the decade, as they surmised that landlord investors were more likely to sell up quickly in any housing crisis, worsening the impact on prices. 

Among the tax and regulatory changes they brought in to take the wind out of the market’s sails was a 3 per cent charge on stamp duty land tax for second homes and buy-to-let; tighter affordability checks for landlords with four or more properties; and the withdrawal of higher rate tax relief on mortgage interest. 

However, the figures also point to a rise in the number of properties held by each landlord. In 2019, they owned an average 1.93 homes, the highest level since 2009 when the average was 2.02 properties per landlord. 

Last year the proportion of landlords owning more than one home reached 30 per cent, a record level. This is a significant increase on 2016, when 21 per cent owned more than one, and on 2009, when just 15 per cent were multiple property owners. 

So bigger landlords are picking up more properties?
Yes. The figures reinforce claims from market experts that the so-called “amateur landlord” with one rental property has been in retreat in the face of the tax onslaught, while professional landlords whose rental business is typically their main source of income have been adding to their stock.

The latter often hold their properties in limited company structures that can retain more of the benefits of mortgage interest tax relief than individual buy-to-let ownership. 

Aneisha Beveridge, head of research at Hamptons International, said: “While 222,570 landlords have left the sector since 2017 due to tax and regulatory changes, those who have stayed tend to have bigger portfolios — a further sign that the sector is professionalising.”

What’s happening to rents? 
They’re going up. Hamptons records the level of rent charged by landlords when properties are newly let, using data from the 90,000 homes let and managed by letting agent Countrywide each year, and basing its results on rents that are agreed rather than those advertised.

It found that in January 2020, rents averaged at £998 per calendar month, 3.6 per cent higher than the same month last year. The highest growth, of 6 per cent, was in the Southwest, but the East and Greater London also posted strong rises of 4.1 per cent from January 2019 to January 2020, with average rent in the capital of £1,783 per calendar month. 

Ms Beveridge said: “Rents rose in every region across Great Britain in January . . . The number of new homes purchased by landlords remains low, which is feeding through to fewer homes available to rent. This is particularly true in the South, where rents are rising the most.”

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