Property cash buyer We Buy Any Home has reported a 75% increase in enquiries from landlords considering selling compared with two years ago.
The company said enquiries rose as the Renters’ Rights Act progressed through Parliament and remained elevated after its measures took effect on 1 May.
Landlord enquiries peaked in June, one month after implementation, although the company has not disclosed the underlying number of approaches or completed sales.
The figures therefore indicate activity among landlords contacting one cash-buying business rather than measuring departures across the wider private rented sector.
SMALL LANDLORD PRESSURE
The Renters’ Rights Act abolished Section 21 “no-fault” evictions and introduced periodic tenancies from the outset.
Its measures also restrict rent increases to once a year, prohibit rental bidding and limit the rent landlords can require in advance. Discrimination against prospective tenants because they have children or receive benefits is also prohibited.
Elliot Castle (main picture, inset right), CEO of We Buy Any Home, says: “Smaller landlords have been dealt blow after blow in recent years. Many already provide safe, decent homes, but the Renters’ Rights Act has forced them to take on huge administrative requirements.
“For those who rent out a handful of properties, with squeezed margins and rising mortgage rates, the new legislation is undoubtedly causing many to question if it’s feasible to continue.
“We have seen enquiries steadily rising, most notably in the second half of last year when the Renters’ Rights Act was being finalised.
“Since then it has remained at a higher level and peaked in June, the month after the new legislation came into effect. We don’t anticipate it decreasing anytime soon.”
ADDITIONAL ADMINISTRATION
Castle says smaller landlords were also preparing for Making Tax Digital, which will require qualifying property businesses to maintain digital records and submit quarterly updates.
He adds: “It might sound like a small admin change, but going from reporting yearly to quarterly is going to be a big change for smaller landlords.
“When you take into account increased regulation, rising costs and a fundamental shift in how the private rental sector operates, it’s probably the toughest environment landlords have ever faced.”
The latest English Private Landlord Survey indicates that landlords with between one and four properties account for the majority of private landlords and around half of rented tenancies.
However, an increase in sales enquiries does not necessarily translate into an equivalent fall in rental supply, as properties may be sold to other landlords or remain available to rent under new ownership.
