Last year, 50% of moving tenants surveyed, said they were forced to leave their homes because their landlords decided to sell the property, indicating that a large number of rental homes are disappearing from the private market.
A significant portion of the properties landlords sold, specifically 66.7%, were bought by people owning a home for the first time.
In a study by rental payment service PayProp, the most common reason given by property professionals for tenant moves was the landlord’s decision to sell, accounting for half of all cases.
Neil Cobbold, the UK head of PayProp, explained, “This reduction in rental homes and the presence of financially secure tenants are putting the private rented sector (PRS) in a tough spot. There are fewer available properties to rent and a backlog of demand from those with less money, which can lead to higher rents as these tenants vie for the limited housing options.
He urged people to contemplate, “Why are so many landlords selling off their properties?”
The age of many landlords, who average at 58 years old, is one reason; they might be considering tapping into their real estate investments for retirement funds. Other reasons include shrinking profits due to reduced mortgage tax relief, higher interest rates for buy-to-let mortgages, more regulations, and the possible end of Section 21 evictions which allow landlords to evict tenants without a reason after their fixed-term tenancy ends.
Cobbold pointed out, “To counteract the trend of declining rental property numbers, the government must find ways to retain current landlords and attract new investors to the sector.
“Otherwise, the shortage of supply will persist, rent prices will keep rising, and tenants will face even more financial burdens.”
The government’s Renters (Reform) Bill has been called the most significant overhaul of the PRS in recent times and it has been grabbing headlines in the industry news.
