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Buy-to-let landlords bought one in ten homes in the first half of this year - the lowest share since records began in 2010.
Until 2016, the private property rental market was thriving. Still, Chancellor George Osborne decided to constrain buy-to-let by making tax and regulatory changes, making the investment less attractive.
New research by property firm Hamptons reveals that buy-to-let has declined since, not because of a landlord exodus but because fewer new investors have entered the market.
Buy-to-let purchases peaked at 16 per cent of the market in 2015 and have reduced yearly to reach this year’s 14-year low of 10 per cent. Most investors buying homes to rent this year are cash-rich landlords expanding their portfolios.
The firm expects investors to buy around 113,500 properties this year—40 per cent fewer than in 2015. According to the report, reducing investment is throttling the supply of rental homes and pushing up rents as tenant demand increases.
Hamptons explained that the market shows no signs of more landlords selling. However, the evidence highlights that landlords are selling fewer homes than three years ago. Buy-to-let deals account for 13 per cent of all sales this year, compared to 14 per cent last year and 16 per cent in 2022.
Although the increasing cost of living and rising interest rates have impacted investment, landlords are more concerned about tax changes and tenant regulatory reform.
London is the worst-affected region, with buy-to-let purchases declining from 17 per cent of homes in 2015 to eight per cent in 2024.
Rent data released by Hamptons tallies with the latest official rent data from the Office for National Statistics (ONS). The firm disclosed that the average UK rent paid by a private tenant is £1,310 a month—just short of the ONS estimate of £1,347.
Hamptons says the annual year-on-year increase to June was 5.6 per cent, although this varied between -0.2 per cent in Central London and 11.1 per cent in the North. The capital was the only place where rents fell.
Region | Monthly Average Rent | Year-on-Year Change |
Greater London | £2,331 | 2.70% |
Inner London | £3,065 | -0.20% |
Outer London | £2,192 | 3.50% |
East of England | £1,281 | 7.00% |
South East | £1,425 | 6.10% |
South West | £1,175 | 5.10% |
Midlands | £975 | 8.50% |
North | £927 | 10.00% |
Wales | £818 | 6.70% |
Scotland | £962 | 11.10% |
Great Britain | £1,347 | 5.80% |
Great Britain (Ex London) | £1,094 | 7.60% |
