Record number of former rental properties are up for sale
The UK's private rented sector (PRS) is facing a perfect storm as a record number of landlords are selling up their properties, Rightmove reveals.
The proportion of former rental homes now available for sale has reached its highest point on record, indicating a significant shift in the market.
Though this isn't, Rightmove says, a landlord exodus there are fears over the anticipated rise in Capital Gains Tax in the upcoming Autumn Budget.
Currently, 18% of properties for sale were previously on the rental market - in 2010, it was 8%.
London's PRS has been particularly hard hit, with nearly a third of homes for sale previously being rental properties.
'Attractive for some landlords to leave'
Rightmove's property expert, Tim Bannister, said: "In recent years it has become more attractive for some landlords to leave the rental sector rather than to continue to invest in it, due to rising costs, taxes and legislation.
"A healthy private rented sector needs landlord investment to provide tenants with a good choice of homes.
"We've seen over the last few years how the supply and demand imbalance can contribute to rising rents, so there is a worry that without encouragement for landlords to stay in rather than leave the rental sector, it is tenants who will pay the price."
He added: "However, despite the trend of more landlords choosing to sell up, it doesn't appear to be a mass exodus, and we will need to monitor the longer-term impacts of what happens to the rental supply that is put up for sale."
Growing demand for rented housing
While the number of new properties coming to market has seen a surge, it's still not enough to meet the growing demand for rented housing.
This imbalance is contributing to rising rents and making it increasingly difficult for tenants to find affordable accommodation.
Rightmove is urging the government to provide incentives for landlords to stay in the PRS.
Support, such as tax breaks and reduced regulations, will encourage landlords to continue investing in rental properties and help alleviate the housing crisis.
Marc von Grundherr, a director of Benham and Reeves, said: "The potential equalising of CGT is, of course, a concern for many landlords.
"If the Labour government was to follow through with it, it could make for a significant increase in the tax paid by the average landlord when the time did come for them to exit the sector."
Demand massively outstrips supply
Chris Norris, the policy director of the National Residential Landlords Association (NRLA), said: "With demand already massively outstripping supply, Rightmove suggests the situation is set to get worse.
"Every rental home that is sold simply exacerbates the imbalance between supply and demand.
"Whilst some of these properties will inevitably end up on the owner-occupied market, that will be of little comfort to those households struggling to access quality housing."
He added: "What we need is a housing strategy that recognises the need for more of every type of property, including high quality homes for private rent.
"That's why the Budget needs to announce pro-growth tax plans to meet the needs of renters across the country."
Homes for rent becoming available to buy
Dan Wilson Craw, the deputy chief executive of Generation Rent, said: "Homes that were previously for rent becoming available to buy is not inherently bad for renters – given that so many renters want to buy, it can provide opportunity.
"However, our primary concern is for tenants whose landlord is selling up and automatically serves an eviction notice.
"We desperately need protections to keep tenants in our homes or otherwise minimise the upheaval when landlords decide to sell up."
He adds: "The answer to affordability in renting is more homes, not more landlords, and providing homes people can afford to live in, in places they want to live, is the way out of this crisis."
'Address the concerns of landlords'
Simon Thompson, the managing director of Accommodation for Students, said: "The PRS is facing a challenging period, and the government will need to take decisive action to address the concerns of both landlords and tenants.
"By providing incentives for landlords to stay in the market, the government can help ensure a stable and affordable rental sector for everyone."
He added: "And while Rightmove says there isn't a landlord exodus underway, it does appear that a growing number are now voting with their feet.
"We have to wait and see what is in the Budget, but the government really does need to address landlord concerns to avoid a full-blown housing crisis."
