Half of tenants vacating a property last year had to do so because their landlord wanted to sell their property, according to a new survey from PayProp.
The automated rental payment and client accounting platform’s latest Rental Confidence Index report revealed that ‘landlords selling the property’ was cited by 50% of property professionals surveyed as the primary reason for tenants moving.
By contrast, eviction was cited by just 11.3% of those surveyed.
The survey also found that more than 54.5% of landlords were in the process of selling properties last year at the time of the survey.
Neil Cobbold, PayProp UK managing director, said: “We know from our survey that the majority of homes sold by landlords (66.7%) are purchased by first time buyers. So, every time a landlord puts a house up for sale, it will generally be permanently lost to the Private Rented Sector (PRS).
“These buyers are generally also the more well-off tenants who are best equipped to deal with the steep PRS price increases we are seeing. That loss of stock and well-financed tenants puts the PRS under pressure, with fewer homes to rent and lots of pent-up demand from less well-off tenants, which in turn can lead to higher rental prices as they compete for the remaining properties.
“The question we should be asking is ‘Why are so many landlords selling properties?’ One reason may be the age of the average landlord, which according to the latest English Private Landlord Survey was 58 in 2021. By now, they may be thinking about retirement and taking the money they have invested in property as an annuity.
“However, in other cases, a lack of profitability will be an issue. A number of factors – an absence of tax reform to address mortgage costs; higher buy-to-let mortgage rates; increased regulation: and the headlines around the abolition of Section 21 evictions – have all combined to make life uncomfortable for many landlords.
“If this trend towards fewer PRS properties is going to be reversed, the government has to find a way to keep landlords in the PRS and encourage more investors to join the sector. If not, supply will remain under pressure and rents will continue to rise, making life more difficult for tenants who are already feeling squeezed.”
