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Landlord purchases are at an all-time low. According to figures released by a leading property agent, the value of landlord acquisitions has dropped by £5.2 billion since 2015. Landlords spent £12.1 billion in the first half of this year, compared to £17.3 billion in the same period of 2015. The number of home purchases is down by 31% compared to 2015, with the biggest fall in the south-east.
Experts say the fall in the value of buy to let investment is because fewer landlords are buying and those who are buying are spending less on properties.
Landlords Quitting London
The figures also show that landlords are quitting London in their droves. Around one third fewer landlords bought properties in London in 2018 compared to 2015. However, the number of London landlords investing in buy to let property outside London increased from 25% in 2012 to 61% in 2018. This is due to the fact London property prices are higher, along with stamp duty bills. Landlords can spend less and enjoy higher rental yields when they move away from the capital.
Scotland and the south-west have also seen falls in the number of landlord purchases. 44% fewer purchases were made in Scotland since 2015.
Rental Yields Rise
Despite falling landlord investment, rental yields continue to rise. The average UK rent has risen by 1.6% each year, with Wales experiencing the highest increases (3.9%). Even in inner London, where rental demand had dropped off, is enjoying another resurgence in demand.
In contrast to the decreased activity in the buy to let sector, the number of first time buyers has increased. It seems as if first time buyers are stepping into the void left by landlords. This outcome validates the Government’s reasoning behind the landlord taxation policies.
Read More:
Is There a Better way to Demolish Rogue Landlords than with Legislation?
Landlords Selling Up in Response to Unfavourable Buy to Let Landscape
