By Rental properties are increasingly being let by company landlords, a trend that has continued since 2016, while rental growth has accelerated, according to a new report by Hamptons International.
The new report estimated that as many as 641,480 homes were owned by company landlords across Great Britain in the first half of 2019, a rise of more than 42 per cent since 2015.
Hamptons International commented that this increase was partly due to a growth in the proportion of company landlords letting rental properties, as well as overall growth in the size of the rental sector itself.
Changing rental sector
According to the new report, 12 per cent of homes were let by company landlords, the highest proportion seen since 2011. However, Hamptons International’s data revealed that this remained below 2008 levels, back when the total was 14 per cent.
The recent growth in company landlord letting reflects a recovery since the financial crisis, after six years of declining company landlord involvement in the rental sector, between 2010 and 2016.
Rental growth accelerated in the first half of this year, with the average cost of a new let costing £986 per month in June, across Great Britain as a whole. This was due to rental growth of 3.1 per cent since the previous year.
London saw some of the fastest rental growth, with rents rising 4.3 per cent in the past year to as high as £1,737 per month in June. As a result, London was recorded as the most expensive region for prospective renters.
Increasing professionalisation
Hamptons International looked into the recent changes in the rental sector, finding that government housing policies were a likely driver for much of it.
Aneisha Beveridge, head of research at Hamptons International, explained: “Increasing taxation for private landlords, combined with the growth of the build-to-rent sector, has meant that more companies are letting homes than at any time since our records began.”
Ms Beveridge noted that London landlords tended to have higher levels of debt, meaning they often have the most to gain from corporate ownership. As a result, London had some of the highest proportions of company landlords letting properties in the whole of Great Britain.
Ms Beveridge concluded: “Strong rents in the South drove rental growth in Great Britain in June. Low stock levels, particularly in the South, continue to put pressure on rents. Rents rose in six out of eight regions in Great Britain, with the East and Wales recording small falls.”
This is so funny. As a private landlord I too have become more ‘professional.’ That is, I do everything as I did before, but now have higher rents to cover the huge new tax levy, that is Section 24. Basically, I collect that from the tenant to give to the Exchequer. There is no evidence that any substantive changes have been made in the sector of more ‘professional’ practices. There isn’t even an agreed definition of what that would consist of.
I too am a landlord and agree totally with Rosalind Beck. The Governmeny reap what they sow. We always told those in power who asked (not many do) that all their tinkering would result in higher rents fof the very people they expose to be trying to help, namely tenants,
The changes by Government have, as a private landlord, led me to planning to increase rent to cover the added costs imposed by Government. And to be extremely picky about who I rent out to as terminating a rental is becoming a major problem. At any time it may be that we opt to downsize to our rental property but doing so may become a real challenge given that terminating the short term rental can become a major issue if the tenant decides not to leave.