Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.

Landlord Sell-Off Slows as Purchases Overtake Sales, Hamptons Reports

Landlord sales slowed in June, with purchases overtaking sales, according to analysis by Hamptons. The data, based on Connells Group figures, highlights shifting trends in the UK private rented sector following recent regulatory and market changes.

Hamptons found that 9.2% of homes listed for sale in June had been previously advertised for rent in the last five years. This is a decrease from 11.3% at the same time last year, and also lower than levels seen at the start of the year and in 2021. The analysis suggests that while the introduction of the Renters’ Rights Act may have prompted some landlords to sell, most exits were linked to earlier tax changes and higher mortgage rates.

The report notes that market and regulatory changes have pushed many landlords out of the market over recent years. By the time the Renters’ Rights Act was implemented, many landlords who intended to leave had already done so. Despite this, the number of rental homes in England has remained around 4.8 million over the past decade, while the total number of homes has increased by about two million, with most of the growth in owner-occupation.

Regional differences were observed, with most landlord exits recorded in London and the South East, where property prices and mortgage costs are higher and yields are lower. In London, a fifth of homes up for sale in June had been let within the last five years, compared to 9.5% in the South East. The largest fall in landlord sales was seen in Northern markets, where stronger yields make buy-to-let investment more attractive.

The Renters’ Rights Act has also made it more challenging for landlords to sell. If a landlord serves a Ground 1A notice to evict a tenant in order to sell, they are banned from re-letting the property for 12 months, even if a buyer is not found. Hamptons’ analysis of last year’s sales found that 51% of homes listed by landlords failed to sell, rising to 60% for flats. If the new law had been in place, 80,000-100,000 unsold rental homes would have been barred from returning to the rental market for a year.

A slower sales market may also be making landlords more cautious about selling, particularly in the South of England. Flats are more affected, with 24.4% of flats up for sale in June having been previously rented, compared to 7.8% of houses. Flats also took longer to sell, averaging 85 days to go under offer compared to 59 days for houses.