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Proportion of Homes Bought by Landlords at 9-Year Low, Countrywide Reports
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
The proportion of homes bought by landlords dropped to a nine-year low of just 12.5% last year, as tax changes deter many from investing in property, reports Countrywide in its latest monthly lettings index.
Between 2016-17, the proportion of homes sold to landlords fell in every region – nowhere more so than in London, where 5,400 fewer properties were bought by a landlord year-on-year.
The declining volume of landlord purchases has caused the number of homes on the rental market to drop.
In December 2017, there were 4% fewer homes to let across Great Britain than in the same month of 2016, with London recording a 21% decrease – the highest of any region.
Although 2016’s Stamp Duty hike induced a fall in stock, there were 5% more homes available to let than there were two years ago. However, in London, the number of homes on the market has fallen by a third.
The decline in the number of investors in the buy-to-let sector comes despite the fact that rental growth across Great Britain picked up in 2017.
Last year, rents rose by an average of 2.4% – up on 2016’s rate of 1.8%. The average rent price ended the year at £960 per month – up by £23 on the start of 2017. While rents rose a third faster than they did in 2016, rent price growth was still behind the 3.2% recorded in both 2015 and 2014.
Unsurprisingly, given the higher taxes that they now face, 46% of landlords increased their rent price when re-letting a property last year – up from 37% in 2016.
London had the fastest rate of rent price growth in England last year, rising by an average of 3.2%. However, it was Scotland, at an average of 3.3%, that had the fastest rate of rent price growth in Great Britain.
Johnny Morris, the Research Director of Countrywide, comments: “Last year saw the rate of rental growth pick up to get closer to its long-term average. Most of the rise comes from a pickup in rental growth in London, after falls in 2016. Rents rose across every region of Great Britain last year, although the north of England saw rents rise at a slower rate than they did in 2016.
“Rental growth has been supported by a fall in the number of homes on the rental market, with the biggest fall in London. It looks like increased competition between tenants for rental homes will drive faster rental growth in 2018.”
