British landlords are exiting the market at the highest rate in three years, resulting in 66 fewer properties on the rental market per day in 2022, according to a Hamptons International analysis of Countrywide (LSE:CWD) data.
Landlords sold 35,000 more properties than they bought in 2022, marking a 17% surge in net property losses compared to 2021, with landlords making up 16% of property sales last year and a mere 13% of purchases.
Soaring mortgage prices resulting from the Bank of England’s rate hikes, combined with unfavourable tax changes, have been cited are core reasons behind the exodus.
Buy-to-let rates have doubled in the past year; HSBC’s two-year fixed rate on a 60% loan-to-value mortgage, for instance, currently has a 5.49% rate followed by a 6.35% variable.
Although corporate build-to-rent investors have somewhat plugged the gap left by private landlords, only 10,900 build-to-rent properties were completed last year, according to JLL property consultants.
David Fell of Hamptons predicted that landlords are likely to continue selling more properties than they buy in the year ahead.
Tenants flee London
There is more than one exodus happening in the UK housing market.
Per data supplied by Hamptons International, four in 10 renters having to move house in 2022 opted to relocate out of London, the highest amount on record.
Numbers have doubled to 90,370 households since 2012, as tenants flee the rapid recovery of post-pandemic rental prices.
Around 38% of escapees have headed to the Midlands and the North, although the Tandridge district in east Surry also appears popular among ex-Londoners, who now comprise over 50% of tenants in the area.
“We expect the number of renters leaving the capital to continue rising for the foreseeable future,” said Hamptons.
Leavers tend to be in their mid-to-late 30s and from the least-affluent corners of London, said Hamptons.
Despite house prices tumbling, renters have not seen any such relief, with average London rents up 9.1% year on year.