Research from Hamptons found that BTL investors were leveraging their chain-free status to snap up homes, accounting for 14.1% of all purchases in July, up from the year-to-date average of 12.4%.
Landlords drive harder bargains
Landlords also sought out bargains, with the average BTL investor paying 88.7% of the initial asking price in July.
Hamptons found that 56% of offers from investors were at least 10% lower than the seller’s original asking price, the highest proportion since the first Covid lockdown in 2020. This was also higher than the 48% share of lowball offers seen the month before in June, and 45% in July last year.
Investors using cash looked for larger discounts, as 63% of offers from cash-backed landlords in England and Wales were at least 10% lower than the initial asking price.
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Owner-occupiers were more conservative, as in July, just a quarter of offers from first-time buyers and 27% of offers from homemovers were more than 10% below the first asking price.
Hamptons said this was likely because owner-occupiers had less leverage and were more likely to rely on a mortgage or be part of a chain.
Investors refuse to sit on the sidelines
David Fell, lead analyst at Hamptons, said that when the market slowed, investors “rarely stand on the sidelines for long”.
He added: “With homes taking longer to sell and chains proving fragile, landlords are using their liquidity and chain-free status to maximise their leverage when it comes to agreeing a price. In a market where certainty has become more valuable, these benefits tend to be worth more than in hotter markets where sellers often have multiple options on the table.
“At the same time, sellers who have been on the market for several months are becoming more pragmatic. This is particularly true for flat owners, where demand remains weaker than for houses, or for those selling in the South of England more generally. While higher borrowing costs continue to weigh on investment returns, landlords with cash or low levels of borrowing are finding that a slower market is creating opportunities to purchase at significantly lower prices than would have been possible a few years ago.”
More sellers accept lower offers
Hamptons found that not only were BTL investors seeking deals, but sellers were also more likely to accept these lower offers. In July, 27% of offers from investors at 10% or more below the initial asking price were accepted, compared to 18% last year.
Flat owners are more willing to secure a buyer, with 41% of sellers of leasehold properties accepting discounted offers. Hamptons said this pointed to the price weakness and lack of demand in this part of the market.
|
|
All homes |
Leasehold homes |
|
Jul-19 |
12% |
15% |
|
Jul-20 |
13% |
11% |
|
Jul-21 |
12% |
12% |
|
Jul-22 |
19% |
24% |
|
Jul-23 |
18% |
35% |
|
Jul-24 |
16% |
13% |
|
Jul-25 |
18% |
18% |
|
Jul-26 |
27% |
41% |
Source: Hamptons using Connells Group data
Sellers want to make a move
There appeared to be a correlation between how long a home had been on the market and how likely a seller was to accept a lower offer.
In July, homes that had been on the market for 45 days typically accepted an offer from an investor within 10% of the asking price, while sellers of properties listed for 109 days accepted offers 10% or more below the asking price.
Properties on the market for 140 days were found to have undergone several price reductions before a lowball offer was accepted.
Lowball offers in the South
The research found that instances of lower investor offers were prevalent in Southern England, excluding London.
In the South East, 70% of offers were at least 10% lower than the asking price, followed by the South West at 60%.
However, the data showed that these offers were rejected by sellers.
In the South East, 54% of offers at least 10% lower than the asking price were accepted, compared to 44% in the South West.
By contrast, just 32% of agreed deals in the North East had offers 10% or more below the asking price. In London, these lowball offers made up just 16% of sales.
Share of offers 10% or more below the initial asking price that are accepted
|
|
Share of investor offers 10%+ below the initial asking price in Jul-26 |
||||
|
London |
30% |
16% |
|||
|
North East |
39% |
32% |
|||
|
West Midlands |
41% |
33% |
|||
|
East Midlands |
49% |
37% |
|||
|
East of England |
54% |
45% |
|||
|
Yorkshire and the Humber |
55% |
50% |
|||
|
Wales |
59% |
53% |
|||
|
North West |
59% |
55% |
|||
|
South West |
60% |
44% |
|||
|
South East |
70% |
54% |
|||
|
England and Wales |
56% |
49% |
Source: Hamptons using Connells Group data
Rental growth picks up again
Hamptons found that rental growth for new lets in Great Britain rose 1.9% year-on-year, bringing the average rent back above £1,401 per month. This was the fastest pace of rental growth for new lets in 19 months.
This was driven by Southern England, where newly agreed rents were rising faster than any other region, following months of slower growth.
Newly agreed lets in Outer London rose back up above the £2,000 per month threshold, having dropped below this level at the start of last year.
Newly agreed lets in the South East passed the £1,500 per month level for the first time in July.
The rate of annual rental growth for all rental homes, including new lets and existing tenancies, fell overall, from 2.2% in June to 2.1% in July.
The average rent across Great Britain is now £1,258 per month.
Annual rental growth
|
Region |
New lets |
All tenants |
||
|
Average monthly rent |
YOY change |
Average monthly rent |
YOY change |
|
|
Greater London |
£2,308 |
0.6% |
£2,147 |
0.7% |
|
Inner London |
£2,725 |
0.5% |
£2,630 |
-0.3% |
|
Outer London |
£2,001 |
0.8% |
£1,792 |
1.9% |
|
South |
£1,388 |
2.8% |
£1,234 |
2.5% |
|
East of England |
£1,279 |
1.9% |
£1,190 |
3.1% |
|
South East |
£1,507 |
2.8% |
£1,327 |
2% |
|
South West |
£1,317 |
3.7% |
£1,139 |
2.7% |
|
Midlands |
£1,066 |
1.5% |
£931 |
3.2% |
|
East Midlands |
£1,003 |
-0.9% |
£885 |
2.8% |
|
West Midlands |
£1,121 |
3.3% |
£971 |
3.5% |
|
North |
£994 |
2.5% |
£863 |
3.4% |
|
North East |
£865 |
1.7% |
£773 |
3.5% |
|
North West |
£1,065 |
2.7% |
£892 |
3.9% |
|
Yorkshire and the Humber |
£958 |
2.4% |
£865 |
2.7% |
|
Wales |
£888 |
4% |
£808 |
1.7% |
|
Scotland |
£1,064 |
-0.2% |
£853 |
3.3% |
|
GB |
£1,401 |
1.9% |
£1,258 |
2.1% |
|
GB (Ex London) |
£1,169 |
2.5% |
£1,031 |
2.8% |
Source: Hamptons using Connells Group data
Feller said: “The rate of rental growth for newly let homes has continued to accelerate in July. While growth is still running below inflation, July still marked the eighth straight month in which the pace of rental growth has risen.
“Although these hikes may not be as large as in previous peak years, for landlords, the re-emergence of an upward trajectory in rents provides a counterweight to higher borrowing costs.”
