Investors are being tempted back into the housing market by rising rents and widening margins, estate agency Hamptons has claimed.

The firm’s data reveals that this year will see the highest proportion of properties bought by investors – 12.2% – up from 11.7% the year before and the highest proportion since 2016.

Rents have risen by 7.7% across the UK and over 12% in Scotland, the agency says and this, coupled slowing house price rises, means gross margins are starting to widen.

The housing markets with the widest margins include Hartlepool (9.9%), County Durham (9.2%) and Middlesborough (8.9%).

“Rising rents are tempting landlords to dip a toe back into the slowing sales market to try and pick up deals they couldn’t have got six months ago,” says Aneisha Beveridge, its Hamptons Head of Research (pictured).

“With sellers more open to negotiation and rents rising rapidly, returns for equity rich landlords have been rising.

“While we’re unlikely to see landlords return to buying at pre-stamp duty surcharge numbers, it’s possible they may outnumber first-time buyers in some months next year, as was common before 2016.”

But the figures also show that the exodus of landlords from the market continues. Although the proportion of sales by investors has risen between 2021 and 2022, fewer sales overall mean the absolute number of investor purchases will be down by around 30,000 on last year.

This is reflected in competition for properties. In November 37% of offers by landlords were on homes without any competing offers, up from just 14% in January.

And a less competitive market means that in November just 25% of investor purchases were agreed above the asking price, compared to 30% among first-time buyers.