The past few years have not been particularly kind to the UK’s buy-to-let landlord community. Tax incentive withdrawals and increasingly unfavourable legislation have made it more difficult than ever to build and maintain a successful BTL business.
Even so, property purchase activity on the buy-to-let market during the first quarter of the year hit a level not seen since 2016. So why is it that in an increasingly difficult climate, more buy-to-let landlords are expanding their portfolios than at any point in the past six years?
The answer, according to some, could lie in skyrocketing average monthly rents across the UK, playing directly into the pockets of savvy landlords.
“While we expect investors to continue purchasing at around the same rate over the course of 2022, it’s unlikely to be enough to make up for the full loss of rental homes during the last five years,” said Aneisha Beveridge, head of research at Hamptons.
“A lack of rental homes is one of the reasons why rents have been rising at such pace over the last year. March set a new record for rental growth as rents bounced back from 2021 lockdown lows last March.”
From January to March, just under 14% of all property sales in the UK went to buy-to-let landlords. That is according to the latest figures from Hamptons, indicating a huge 12% increase from the same three months last year.
In addition, total buy-to-let property purchases for the quarter were the highest recorded since the first three months of 2016, when BTL landlords snapped up almost 16% of all properties sold. In the interim, buy-to-let purchases have typically accounted for around 10% of all property sales on average.
A total of 42,980 homes in Great Britain were purchased by private landlords during the first three months of the year, with a total combined value of around £8.5 billion. Research suggests that the UK’s total buy-to-let housing market now comprises 8.7 million homes, making the UK the fourth biggest rental market in the world proportionally.
The Aftereffects of the Pandemic
Meanwhile, data published by Zoopla suggest that the number of people searching for rental properties in the UK is around 76% higher than it was over the past three years. Experts believe this may be attributed to the number of younger people moving out of their parents’ homes and back into big cities, as the slow but steady transition back to normal office life continues.
In addition, the fact that millions of would-be buyers simply cannot afford to get on the property ladder in the UK is playing into the hands and pockets of private landlords. According to Rightmove, average rents outside London are up 9.9% to a record £1,068 per calendar month, and rental prices inside London have risen by 10.9% to £2,142 per month.
Cost of living increases, energy price hikes in particular, are putting a greater strain on the budgets of households across the country, rendering the prospect of home ownership impossible for many.
Craig Upton supports UK businesses by increasing sales growth using various marketing solutions online. Creating strategic partnerships and keen focus to detail, Craig equips websites with the right tools to rank in organic search. Craig is also the CEO of iCONQUER, a UK based SEO Firm and has been working in the digital marketing arena for many years. A trusted SEO consultant and trainer, Craig has worked with British brands such as FT.com, djkit.com, UK Property Finance, Serimax and has also supported UK doctors, solicitors and property developers to gain more exposure online. Craig has gained a wealth of knowledge using Google and is committed to creating new opportunities and partnerships.
Published by Craig Upton