More landlords are looking to sell rental properties away from the major portals following the introduction of the Renters’ Rights Act, according to property search service HomeFinder AI.
The firm says it has recorded an increase in approaches from landlords looking for buyers since the legislation came into force in England on 1 May.
While HomeFinder AI has not published transaction numbers to quantify the increase, its experience comes against wider evidence that landlords remain cautious about the impact of the reforms and that rental supply continues to face pressure.
The Act represented a major overhaul of England’s private rented sector, with most existing assured shorthold tenancies automatically becoming assured periodic tenancies from 1 May.
LANDLORD CONFIDENCE
Separate research suggests regulatory change is influencing landlords’ portfolio decisions.
The latest Pegasus Insight Landlord Trends research found landlords continue to be considerably more likely to sell properties than purchase them, despite tenant demand strengthening during the second quarter. Some 63% of landlords described demand in their area as strong, up from 58% in Q1.
Earlier Pegasus research found around three-quarters expected the Renters’ Rights Act to negatively affect their own lettings activity, with concerns particularly focused on possession processes and the capacity of the courts.
James Nightingall, Founder of HomeFinder AI, says: “The majority of landlords who approach us to find buyers are leaving the rental market amid new legislation introduced by the Renters’ Rights Act.
“Many feel their investment will no longer deliver the return they are looking for and new tenant rights will only create more administrative hurdles.”
RENTAL SUPPLY
The suggestion that landlords are selling comes as rents continue to rise. The latest Office for National Statistics figures show the average UK private rent reached £1,393 a month in July, 3.7% higher than a year earlier. In England, rents increased 3.8% to £1,451, while London remained the most expensive region at £2,317.
Nightingall says some landlords looking to exit are choosing off-market sales because they want to target investors and other buyers capable of moving quickly rather than publicly marketing at a fixed asking price.
He adds: “Landlords want to achieve the best possible price for their property and feel that publicly listing it on portals with a given asking price might not attract the right buyers.
“Instead, they rely on an off-market network which often sees more serious buyers and investors who are in a position to make an offer and exchange faster.”
