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Half of renter moves caused by landlord sales – PayProp
Some 50% of tenant moves last year were because of landlords selling their property, a rental survey has revealed.
The PayProp Rental Confidence Index report showed that this was cited as the main reason for a move in half of the survey’s responses.
Just 11.3% of property professionals polled said tenants were made to move due to being evicted.
The survey also found that 54.5% of landlords were in the process of selling their properties last year, at the time of the survey.
The PRS losing properties
Neil Cobbold, managing director of PayProp, said: “We know from our survey that the majority of homes sold by landlords – 66.7% – are purchased by first-time buyers. So, every time a landlord puts a house up for sale, it will generally be permanently lost to the private rented sector [PRS].
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“These buyers are generally also the more well-off tenants who are best equipped to deal with the steep PRS price increases we are seeing. That loss of stock and well-financed tenants puts the PRS under pressure, with fewer homes to rent and lots of pent-up demand from less well-off tenants, which in turn can lead to higher rental prices as they compete for the remaining properties.”
He added: “The question we should be asking is ‘Why are so many landlords selling properties?’”
Cobbold suggested that age might be a factor as for why landlords were selling up, with the average age of a landlord standing at 58, according to the most recent English Private Landlord Survey conducted in 2021.
He said: “By now, they may be thinking about retirement and taking the money they have invested in property as an annuity.”
Squeezed profitability
Cobbold added: “However, in other cases, a lack of profitability will be an issue. A number of factors – an absence of tax reform to address mortgage costs, higher buy-to-let [BTL] mortgage rates, increased regulation, and the headlines around the abolition of Section 21 evictions – have all combined to make life uncomfortable for many landlords.
“If this trend towards fewer PRS properties is going to be reversed, the government has to find a way to keep landlords in the PRS and encourage more investors to join the sector. If not, supply will remain under pressure and rents will continue to rise, making life more difficult for tenants who are already feeling squeezed.”
Impact of the Renters Reform Bill
PayProp also polled property professionals about the Renters Reform Bill, which has been progressed to the House of Lords.
It suggested the amendments made to the bill had a positive impact, as there was a decline in the share of people who felt negative about the PRS compared to 2022.
Some 51.6% felt positive about the future of the sector.
There was also a drop in people saying it was either ‘unlikely’ or ‘very unlikely’ that they would still be in the sector in five years, with this representing 12.9% of respondents.