Retiring landlords make up three quarters of PRS sales
New research has shown that 73 per cent of all landlord sales in 2022 were made by landlords retiring from the sector.
The supply crisis within the PRS has never been far from the headlines in recent months, with the figures suggesting the generation of landlords who benefitted from the birth of the buy-to-let mortgage in the late nineties are now starting to sell up.
The figures come from estate agent Hamptons in a new research report out this week which includes analysis suggesting 140,000 landlords retired in 2022.
It says: “With the average landlord turning 60, it’s predominantly these older investors who are leaving the market. This figure is likely to continue rising over the coming years, with around 96,000 landlords turning 65 each coming year across Great Britain.
“This is in addition to the almost one million landlords (924,000) who are already over the age of 65. Over the last 12 years between 2010 and 2022 we estimate the number of landlords retiring annually has doubled as their demographic ages.”
While these are large numbers of properties the report does not explain who is buying them, whether the homes are being snapped up by owner occupiers or a new generation of younger landlords.
Whatever the case, the gap between supply and demand for rental homes continues to grow, with rents increasing as a result. The report goes on to say that the number of rental homes on the market is nearly two-thirds below pre-pandemic levels, something reflected in new Zoopla figures out last month.
Zoopla says demand for PRS homes, against a five-year average is up 51 per cent, with the number of available rental homes down 33 per cent, with rental inflation for new listings on the platform now at 11.1 per cent.
It concludes: “We expect a continued scarcity of homes for rent over 2023 given the weaker economics for investors. Ongoing completions of build to rent schemes will be one bright spot, adding supply at the mid to upper end of the market across UK cities.
“One additional area of potential supply could come from sellers renting out homes they can’t sell due to a weaker sales market, but conditions aren’t sufficiently challenging at this stage for this to impact the outlook.”
The NRLA is committed to tackling the supply crisis within the PRS, calling for the Government to review the impact of recent tax changes on landlords to give them the confidence to remain in the sector and continue to invest. You can read more about the campaign here.