UK landlord numbers hit 7-year low

AFS Team·5 March 2020·4 min read
UK landlord numbers hit 7-year low

UK landlord numbers hit 7-year low

The number of landlords in the UK has now reached a seven-year low after a government-led clampdown on the buy to let sector.

New figures from Hamptons International reveal that the curbs to control the growth of the BTL sector, which included a series of tax reforms, has led to landlords leaving.

The real estate firm found that the number of landlords has fallen from a 2017 peak by 223,000 to reach 2.66 million landlords in 2019.

However, Hamptons International also says that the number of homes in the private rental sector has also dropped to 5.13 million, from 5.29 million.

In turn, they say that the decline in supply numbers has led to rents rising and over the past year, they grew by 3.6%.

Decline in landlord numbers buying new properties

Of the regions surveyed, rents grew quickest in the South where there's a particular decline in landlord numbers buying new properties.

The figures also illustrate that the number of properties that are held by a landlord is also on the rise.

In 2019, the proportion of landlords owning more than one property hit 30%, a new record.

In 2016, the figure was 21% and in 2009 it was just 15%.

There's also a worrying trend that landlords are now leaving the market in the face of the tax clampdown, whereas professional landlords who rely on rent as their main source of income have been boosting their portfolio numbers.

Hamptons' head of research, Aneisha Beveridge, said: "Since 2017, 222,570 landlords left due to regulatory and tax changes and those who stayed have bigger portfolios and it’s a sign of the sector professionalising."

The best buy to let investment type revealed

Meanwhile, landlords looking to invest in new buy to let properties should consider two-bedroom homes since they deliver a higher average yield.

The findings from Howsy highlight these homes have an average yield of 4.8%, whereas one-bedroom homes have a yield of 4.1% and three bedroom properties have a yield of 4.5% on average.

The survey also reveals that investing in a two bed buy to let property in the North of England, particularly in the North East, will help boost rental yields where they can reach 5.5%.

The next best area is the North West with an average yield of 5.3% for a two bed property and in the Yorkshire and Humber region where yields are 5.2%.