Record Low Buy To Let Property Purchases

Figures from Hamptons (estate agents) as well as UK Finance UK Finance (trade association for the UK banking and financial services sector) has found that so far in 2024, the number of property purchases as a % of overall property purchases has fallen to a new low since records began in 2010.

9.7% of residential purchases in June were by landlords buying investment property to rent.

This is a significant fall compared to 2015 when 16% of purchases were by landlords.

Why the fall in landlord purchases?

• The numbers of new landlords entering the market has fallen dramatically.
• Record numbers of existing landlords are selling up.
• Result = lower numbers of property available to renters pushing demand per property up and therefore rents up and becoming less affordable.

Comment

In addition to higher interest rates anyway meaning property is less atractive as an investment, the old Conservative government and the new Labour government are getting what they wished for and indeed have forced the position which could prove disastrous.

• Tax relief in mortgage interest was reduced to basic rate tax only meaning those higher rate tax payers that are more able to buy investment property to rent are not entering the market.
• Higher Stamp Duty penalties for buying 2^nd homes and buy to let investments has a 3% premium for UK purchasers and a 5% premium for non-UK resident purchasers.
• Fire Safety regulations have mean that many landlords have spent £000s on safety improvements (and continue to do so) when owner/residents do not always have to comply.
• Minimum energy performance certificate (EPC) requirements of at least a C were required (now removed but they will come back) meaning many landlords have spent £000s already of heating effiiciency and insulation when owner/residents do not have to comply with this.
• Capital gains tax allowances have been reduced and capital gains tax rates look set to increase making property investments even less attractive.
• Doubling up of council tax on 2^nd homes.
• The Renters Reform Bill (Conservative) and now the new Renters Bill is committed to giving tenants even greater rights to prevent eviction.

Is it any wonder landlord numbers are down?   You should have been careful what you wished for Mr Prime Minister (formerly Sunak and now Starmer) as you now have it and it will mean more hardship for renters nand an increase in homelessness.

Social housing is also being sold off to avoid repair costs, fire safety costs and energy peroformance improvements as well as local authorities not building enough new property to rent meaning that with an increasing population there is even greater strain on social housing and with lower private landlord property numbers, it is going to worsen unless you relax the pressure on good landlords (and reward them) and penalise poor landlords who do not keep property at an acceptable living standard.