14 December 2017
Accidental landlords add 80,000 rented homes to the market
One in 12 homes that came onto the rental market in 2017 was previously for sale, although the number of properties let out in this way were more than double in London (12.5%) compared to the figure in Yorkshire (6%) – making London the ‘accidental landlord’ capital of the country.
A slower sales market in the South of England has revived the accidental landlord ratio, as more people choose to rent their properties out instead of waiting for a sale. One in twelve (8.2%) or 80,000 homes that came onto the rental market across the UK in 2017 had been up for sale within the previous six months. This is the third consecutive year that this proportion has increased, although it remains well below the previous peak in 2010 where 11.2% of homes that came onto the rental market had previously been put up for sale.
A positive reflection of the saleability of homes in Yorkshire, which are more affordable than comparable options in the South. Would-be sellers across the rest of Great Britain are considerably less likely to put their home up for rent rather than sell, with just 5.6% of new rental homes in Scotland previously been put up for sale.
Compared with traditional landlords, accidental landlords tend to stay in the rental sector for a much shorter period of time. While the average investor owns their rental property for 17 years, the typical accidental landlord rents out their home for an average of just 15 months. Eighty nine per cent of accidental landlords put their property back up for sale after the first tenant moves out, rather than looking for a new tenant.
Healthy rental growth in the North
Rents rose 1.2% over the last year, seven times faster in the Midlands than in London, with the North (including York) witnessing the 2nd highest rise of 2.3% after the Midlands which saw an increase of 2.8% in rental value.
When looking at the UK excluding London, rental growth reached 1.6% overall, highlighting the continued strength of the rental market in the North. After rental values had fallen in 8 out of the last 12 months in London, the most recent pickup sees these figures return to positive figures, although the rise in London is still the lowest in the country.
Commenting Johnny Morris, Research Director at Countrywide, said:
“While most landlords are in the business by choice, the last three years have seen an increase in the numbers letting out a property they had previously tried to sell. With mortgage rates remaining low, these discretional sellers can afford to let their home, while they wait and see what the future holds for the sales market.
“Rental growth in London is once again positive. Every region of Great Britain now has average rents higher than a year ago. And it’s likely that relatively low numbers of rental homes coming onto the market will keep rental growth firmly in positive territory. But growth remains well below the long run average, with November 2017 marking the second year anniversary of the date when rents last rose by more than 3%.”