Buy-To-Let Decline: Impact on UK Rent Prices

Landlords are buying fewer buy-to-let homes as property experts warn reducing supply is likely to push rents even higher.

Fresh data shows landlords bought 9.6 percent of homes sold in January, the lowest level since records started in 2009 and the first single-digit proportion.

The study by property firm Hamptons reveals 39 per cent fewer homes for rent now than in January 2019.

The buy-to-let market is even worse in London, where the number of homes to rent has dropped by half since January 2019, and landlords buying property to rent accounted for just 7 per cent of purchases.

Rents still soaring

The latest official data from the Office for National Statistics shows private rents soared by 8.7 per cent in the year to the end of January - a slight drop of 0.3 per cent from 9 per cent in December and just shy of the record 9.2 per cent rise in March 2024.

The average rent in England is £1,375 a month, while in Wales, it is £995. Renters in London pay the highest average monthly rent—£2,227. The lowest rents are in the North East, where they average £710 monthly.

Annual rent is rising fastest in London (11 percent) and slowest in Yorkshire and the Humber (5.3 percent).

ONS English regional rents: 12 months to January 2025

Source: ONS

Private data at odds with official figures

Rent data from tenant reference firm Homelet disclosed the pace of rent rises has slowly dropped over the past four months.

According to the latest Homelet data, rents fell by 0.9 percent in the year ending January, the slowest rate since July 2020.

The average UK rent is now £1,271 a month. The average rent in London is £2,025 a month, down 2.2 per cent in January and the third month in a row to see a fall.

Renters in the capital spend an average of 32.5 per cent of household income on rent.

Homelet English regional rents: 12 months to January 2025

Source: Homelet