Buy-to-let housing stock has declined over 25 years

Martin Stewart, founder of London Money, said the buy-to-let market over the past 25 years has seen a “significant decline in housing stock”.

He said it contributed to the reduction in the number of houses on the housing market and investment in rentals.

Stewart commented: “There are over 2.5 million landlords in the UK and 10 per cent of homes bought are now for investment purposes.

Both are sufficient in their own right to suggest that buy-to-let has significantly reduced housing stock over the past 25 years.

Housing inventory has declined since 2021, according to GetAgent’s latest research.

The analysis showed an average drop of 12.5 per cent in homes listed by estate agency branches across Britain since last year.

People looking to move to the Exeter EX38 area have seen the biggest drop in house listings since 2021, with a 93 per cent discount per branch, according to GetAgent (see chart below).

In 2022 and 2021, the houses listed by one branch are the areas with the highest discount

Postal code Area / Location Details by Branch – 2021 Details by Branch – 2022 Change – details in branch 2021 vs 2022
EX38 Exeter 14.3 1 -93.00%
LL15 Denbighshire 22.7 1.7 -92.60%
ST13 Staffordshire 9.1 1 -89.00%
IV36 Moray 9.3 1.1 -87.80%
YO43 East Riding of Yorkshire 8.9 1.4 -83.90%
N 13 South Northamptonshire 14 2.3 -83.70%
PL15 Cornwall 27.5 4.6 -83.40%
SK17 Derbyshire Dales 13.8 2.3 -83.10%
WA7 Halton 10.3 1.8 -82.80%
LA13 Barrow-in-Furness 19.8 3.6 -82.00%

Source: GetAgent

Colby Madam Short, chief executive of Gate Agents, said: “With the market suffering its own drought in terms of available inventory, further reductions should ensure that the balance of supply and demand is balanced.

“As a result, property prices remain strong despite the high cost of living pressures.”

Last week, FTAdviser reported that property investors are spending an average of 1.2mn per property portfolio, according to research by Octane Capital.

When FTadviser reported on the research at the time, Jonathan Samuels, CEO of Octane Capital, said: “Portfolio investing offers sophisticated investors a quick way to grow their portfolios and, as is often the case when buying in bulk, doing so can ensure safety. Greater value level per class.

Building portfolios helps property investors

While buying an entire property portfolio is a popular way for landlords to increase their investment, it has been suggested that when landlords buy and sell entire property portfolios to each other, this housing stock is not available to homebuyers.

Paul Brett, managing director of Landbuy Brokers, said: “There was talk at the start of the year that landlords might start selling, as interest rates started to rise. [but] This has not happened yet.

“Indeed, we’re looking at many of them growing their portfolios using their limited companies to do that.”

Supply and demand remains an issue in the residential property market.

Brett commented: “Of course there is a supply and demand issue for housing, but the challenge here is applicant affordability.

However, the impact of property portfolios on the property market is uncertain, according to Stewart.

Stewart commented: “I’m not sure there’s enough data to confirm the true impact of portfolio lending, especially when lenders themselves have different rules on things that aren’t portfolio lending.

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