Landlords sell-off slows but 140,000 properties still to disappear

By the end of the year landlords will have sold 294,300 more homes than they’ve bought since 2016 – that’s more than the total number of homes in Manchester (main picture) or Cornwall, research from Hamptons reveals today.

Its October Lettings Index shows that although the buy-to-let sell off is slowing – down from 15.7% in 2022 to 14.0% – investors are still set to sell 139,820 buy-to-lets across Great Britain (GB).

SCOTLAND

And landlord sell-off in Scotland has accelerated faster than elsewhere with purchases hitting a record low as tighter rules and regulations begin to bite.

While institutional investment in the private rented sector through build-to-rent schemes will have filled some of the gap left by private landlords overall there were 43% fewer homes available for tenants to rent in the first 10 months of this year compared to the same period in 2015.

So far this year private landlords have accounted for 14% of all sellers, down from 15.7% in 2022.”

But even with rising running costs and higher mortgage rates eroding profits, so far this year private landlords have accounted for 14% of all sellers, down from 15.7% in 2022.

Landlords sold 103,130 homes across GB between January and September this year, 39,270 or 28% fewer than during the same period last year as transactions slowed across the board – the lowest number of homes sold by investors during the first three quarters of a year in a decade.

Hamptons says that if this pace continues and a total of one million sales take place across GB this year, private investors are set to sell 139,820 buy-to-lets in 2023, 53,240 fewer than in 2022 and 61,810 less than in 2021 when landlord sales peaked.

JUGGLING ASSETS

Aneisha Beveridge, Head of Research at Hamptons, says: “Portfolio investors – who tend to be more highly leveraged – are juggling their assets by selling one or two properties to reduce their mortgage debt on the rest of their portfolio, rather than selling up entirely.

“Most landlords cashing in are one of the 10%-20% of mortgaged investors who face making losses when remortgaging at higher rates.

“Typically, they bought low-yielding properties in the South of England relatively recently or they’ve been aggressively maximising their leverage and extracting equity to grow their portfolio.”

She adds: “The real supply issue facing the private rented sector hasn’t just been caused by landlords selling up but also because there’s been little appetite among investors to purchase new buy-to-lets over the last few years.

“This has reduced the number of homes available to rent which is fuelling rental growth. After adding wider inflationary pressures on top, we think rents will have risen by 25% by the end of 2026.”