A growing number of landlords are either exiting the property market or reducing their portfolios, according to a recent analysis by TwentyEA.
Data reveals a significant rise in the number of properties listed for sale that were previously available for rent within the last three years. In June 2024, 18.4% of all properties listed for sale had been listed for rent within the past three years. This amounts to just over 28,000 properties, a staggering 100.6% increase from June 2023 and 34.6% higher than in June 2019. Notably, this figure is also 27.4% higher than in May 2024, coinciding with the announcement of a general election by Prime Minister Rishi Sunak.
Katy Billany, executive director of TwentyEA, commented on the findings, stating, “There’s no doubt our data shows a significant uplift in the number of landlords selling up, either reducing their portfolio size or possibly exiting the sector completely. There’s currently a lot of uncertainty in the buy-to-let market regarding what the change in government means for landlords. They have also been hit by steep interest rate rises and rising costs generally, so it’s likely there are several factors at play here.”
Further insights from the report indicate that 2024 is experiencing a return to normalcy in the property market. The supply of new instructions is up by 8.6% for the quarter, while sales agreed have increased by 15.1% compared to Q2 2023. Both metrics now exceed levels seen before the economic challenges during the Truss/Kwarteng tenure and prior to mortgage affordability issues.
Additionally, property exchanges have increased by 10.4% compared to Q2 2023, demonstrating a recovery from the sales market stalling in late 2023 due to significant interest rate changes. Properties priced between £200,000 and £350,000 have seen an increase of over 3.5% in exchanges, while those in the £350,000 to £1 million range are up by 1.3%.
“These segments are considered the core of the residential property market and are essential for overall market vitality; without growth here, the market stagnates,” Billany explained. “Conversely, the lower end of the market, properties up to £200,000, has declined by 4.6% as first-time buyers have faced significant challenges due to mortgage availability, affordability issues, and limited stock. For properties priced over £1 million, a decline of 2.3% indicates that even those less affected by affordability concerns are experiencing a subdued market at the upper end.”