UK Landlords: Staying Afloat Amid Rising Costs

Image credits: Tierra Mallorca / Unsplash

Despite the rising costs and higher mortgage rates chipping away at profits, most UK landlords are holding on. This year, private landlords accounted for 14.0% of all sellers in Great Britain, a slight drop from 15.7% in 2022.

Landlords sold 103,130 homes across Great Britain from January to September this year, 28% fewer than the same period last year. This marks the lowest number of homes sold by investors during the first three quarters of a year in a decade, excluding the Covid-impacted 2020.

Despite the fall in investor sales, landlords are still selling more homes than they're buying. Since 2016, when tax and regulatory changes were introduced, individual landlords have sold 294,300 more homes than they've bought. This has resulted in 43% fewer homes available for tenants to rent in the first 10 months of this year compared to the same period in 2015.

Scotland is the only region in Great Britain where the landlord sell-off has accelerated this year due to tighter rules and regulations, predominantly in the form of rent caps. Meanwhile, in the North East, the highest-yielding region in the country, the pace of landlord sales has slowed.

In London, new purchases have slipped, with landlords buying 9% of homes sold in the capital this year, down from a peak of 20% in 2015. Consequently, there are half as many homes available to rent in the capital as there were in 2015.

As cost pressures mount, buy-to-let increasingly only stacks up for the highest-yielding homes. Landlords are increasingly selling lower-yielding homes, while those purchasing a new investment are targeting higher-yielding options.

Rental growth shows little sign of slowing, with rents rising 11.7% year-on-year across Great Britain in October. Rents are rising in every region, with London and Scotland leading the way.

Given that the factors pushing up rents are unlikely to recede anytime soon, we predict that rents will rise by a further 25% by the end of 2026. Despite the challenges, it seems UK landlords are here to stay.

Link to main article: Landlord sell-off slows everywhere apart from Scotland | Estate Agents London | Letting Agents | South East England | Hamptons