Recent data unveiled by residential estate agent Hamptons unveils a surprising trend in the UK’s real estate landscape: despite speculations of a mass exodus from the rental market, the number of homes sold by private landlords has seen a decline. A mere 14% of all sellers this year represented private landlords, a drop from the 15.7% recorded in 2022.
Between January and September this year, landlords sold 103,130 homes, marking a significant decrease of 28% from the same period last year, amounting to 39,270 fewer properties hitting the market. Notably, excluding the anomaly of 2020 during the peak of the pandemic, this year marked the lowest number of homes sold by buy-to-let investors in a decade’s first nine months.
Hamptons’ latest projections estimate that this trend is set to continue, with a forecast of 139,820 buy-to-let sales in 2023, significantly lower than both 2022 and 2021 when sales peaked.
Earlier predictions from Hamptons indicated an anticipated exit of nearly half a million landlords from the buy-to-let sector over the next five years. However, despite a decrease in sales, landlords remain net sellers, acquiring only 11.2% of all properties sold across Great Britain.
While the sales figures depict a shift, the rental market tells a different story. The Hamptons’ research underlines an 11.7% year-on-year rental growth across Great Britain in October, maintaining the same pace as September. Consequently, the average rent for a new property climbed to £1,345 per calendar month in October, a £141 increase from the previous year and marking the third consecutive month of double-digit rises within the last 12 months.
Notably, rental hikes spanned across all regions, with Outer London experiencing a 14.8% increase and Scotland seeing a 12.9% surge in rents. Aneisha Beveridge, head of research at Hamptons, highlighted the resilience of landlords despite challenges posed by higher rates, with many choosing to sustain their portfolios amid strong rental growth.
Beveridge emphasized that the reduced supply of rental properties is not solely due to landlords selling their assets but also reflects a lack of investor interest in new buy-to-lets in recent years. This scarcity, coupled with broader inflationary pressures, is projected to escalate rents by 25% by the end of 2026.
The trends underscore a nuanced landscape where landlords navigate challenges while the rental market continues to flourish, presenting both opportunities and complexities within the UK’s real estate sector.