New research carried out by Hamptons found that a generation of landlords with buy-to-let mortgages are retiring and selling up, leaving fewer properties to rent. The research estimates around 140,000 people who bought property in the 1990s to rent-out, sold them last year to fund their retirements.
The agency warned numbers were likely to continue rising and new landlords were not filling the gap left behind. The research pointed out that approximately 96,000 landlords will turn 65 each coming year across Great Britain and this was likely to mean less rental property would be available, particularly because younger people do not have the money to invest into the buy to let sector.
Hamptons said its research was based on its network of agents and data from the Office for National Statistics. It added it was reflective of the entire rental market which currently has a pool of 2.75 million landlords.
As the number of available rental properties falls, renters in London are likely to face even more competition and higher prices.
This ties into new research conducted by flatshare website SpareRoom, who found that, for the first time ever, there was not a single London postcode, with an average monthly room for rent at less than £700.
Their data revealed that average monthly room rents in the capital have now soared to £952, up 20% year-on-year. There are now more than 30 postcode areas where the average rent is £1,000 or more, and rooms in Chelsea have passed the £1,500 mark for the first time.
A director at SpareRoom said: “Although demand for rooms has fallen since the record highs at the end of 2022, it’s still above pre-pandemic levels.
“Combined with higher interest rates and an increased cost of living, that’s continuing to push rents up. There’s now not a single London postcode with an average monthly rent under £700.”
He added: “Demand is likely to fall a little over the course of the year, but unless something is done to stop the continuing decline in rental supply, things aren’t likely to improve much for renters.
Leading Lenders Ease Cost Of Fixed-Rate Deals
A number of lender including HSBC, Nationwide, Virgin Money and Aldermore have made competitive reductions to some of their products.
HSBC is cutting its two, three and five-year mortgage fixed rates by up to 0.25 percentage points. It has also introduced a £300 cashback incentive to new customers who remortgage to a fixed rate with the bank.
Nationwide building society is cutting its fixed mortgage rates by up to 0.3 percentage points for new and existing borrowers with low amounts of equity or a small deposit.
Included among the reductions from Nationwide – effective from Friday 14 April – are a five-year, fixed-rate mortgage at 4.44% (90% LTV) and a two-year fix at 5.29% (95% LTV) that both incur a £999 fee. Each deal is aimed at new customers.
More house price drops expected despite signs of market stabilising
UK house prices are expected to continue to fall despite surveyors’ expectations that the housing market will stabilise over the next 12 months, a study has shown.
The Royal Institution of Chartered Surveyors’ (Rics) monthly survey, which measures the proportion of surveyors reporting new buyer inquiries against those saying they fell, found the net balance was -29% in March, almost flat on the -30% recorded in February.
Prices continued to drop, with a net balance of -43% of respondents reporting a decline in the latest survey. However, the figure was an improvement on the -47% reported in February, breaking a streak of 10 consecutive months in which the indicator deteriorated.
Analysts said that an expected fall in interest rates later this year could spur a pickup in sales, but that prices were likely to continue to fall.