More than 290,000 homes have been lost from the private rented sector in England as more landlords are looking to sell than buy, according to a new report.
Research by Savills reveals smaller private landlords are selling their properties and being replaced by the more expensive Build-to-rent (BTR) sector.
The data by Savills comes from using listings data from a property portal in combination with HM Land Registry sales data.
290,000 rental properties lost from the rental market
According to Savills, using the listings data, in 2024, 5.4 homes were sold from landlords to owner-occupiers for every one home bought by landlords from owner-occupiers, a 5:1 ratio.
This is a much faster rate than in 2021, where the ratio was around 1:1.
The data also reveals between April 2021 to October 2024, 290,000 rental properties were sold out of the rental market, accounting for 6% of the private rented sector in England and Wales.
Savills says whilst new investment in the Build-to-rent market has gone some way to add new supply to the private rented sector, it is not happening fast enough to replace lost supply and meet demand.
19% of landlords sold properties in the past year
Savills also points to data from the National Residential Landlords Association (NRLA) which reveals a growing number of landlords selling their properties.
According to the NRLA, in 2024, 19% of landlords sold properties in the past year, while only 8% purchased new ones.
Also, 41% of landlords plan to sell properties in the next 12 months, compared to just 6% who intend to buy.
Tax measures have made BTL less attractive
Savills points to a range of tax measures that have made buy-to-let less attractive to invest in, as landlords continue to sell. The firm says existing landlords have been squeezed by the phasing out of mortgage interest tax relief.
Section 24 was introduced in the Finance Act 2015 by then Chancellor George Osborne. It removed a landlord’s ability to offset all of their mortgage interest from rental income before calculating their tax liability, replacing it with a 20% basic rate deduction.
Savills also points to last year’s Autumn Budget, where Chancellor Rachel Reeves boosted the stamp duty land tax (SDLT) surcharge from 3% to 5% for those buying additional properties.
Savills warns that landlords leaving the market will have huge consequences for the housing market.
Guy Whittaker, research analyst at Savills, says: “Loss of rental supply has far-reaching consequences for the housing market. Demand for rented homes is high because the private rented sector provides homes for a very broad range of people.
“First and foremost, the private rented sector is the tenure of choice for young people. This includes those studying at University, in the early stages of their career or those who need to move often for work. But the private rented sector also represents the ‘squeezed middle’ of housing tenures: making up for the lack of delivery of Affordable homes and meeting housing need from those priced out of home ownership.
“With a lack of supply and elevated demand, the inevitable consequence is high rents that are growing strongly.”
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