Slow sales triggers rise of 'accidental landlords'
A slower sales market in the South of England has triggered a rise in accidental landlords as more people chose to rent their properties out instead of waiting for a sale.
One in 12, or 80,000 homes that came onto the rental market in 2017, had been up for sale within the previous six months, according to the latest lettings index report from Countrywide.
This is the third consecutive year this proportion has increased, although it remains well below the previous peak in 2010, where 11.2 per cent of homes that came onto the rental market had previously been put up for sale.
London has the most accidental landlords where some 12.5 per cent of homes coming onto the rental market had previously been up for sale, in 2017.
With a stronger sales market outside the capital, potential sellers across the rest of Britain are much less likely to put their home up for rent. Just 5.6 per cent of new rental homes in Scotland had been up for sale.
Accidental landlords tend to stay in the rental sector for an average of just 15 months, with 89 per cent putting their property back up for sale after their first tenant moves out, compared with the typical buy-to-let-investor, who owns their rental property for 17 years.
Johnny Morris, research director at Countrywide, said: "While most landlords are in the business by choice, the last three years have seen an increase in the numbers letting out a property they had previously tried to sell. With mortgage rates remaining low, these discretional sellers can afford to let their home, while they wait and see what the future holds for the sales market.
"Rental growth in London is once again positive. Every region of Britain now has average rents higher than a year ago and it is likely that relatively low numbers of rental homes coming onto the market will keep rental growth firmly in positive territory.
"But growth remains well below the long run average, with November 2017 marking the second anniversary of the date when rents last rose by more than 3 per cent."
Meanwhile the annual rate of rental growth picked up in November, with the cost of a newly let property across the country up 1.2 per cent over the last 12 months or 1.6 per cent outside London.
The report suggests that the resurgence has been driven by rental growth in London returning to positive territory, but even so, after falls in eight of the last 12 months, rents in London are growing more slowly than anywhere else in the country.
The biggest growth in rents was in the Midlands with a rise of 2.8 per cent, followed by Northern England up 2.3 per cent, Scotland up 1.7 per cent, Wales up 1.6 per cent, the East of England up 1.2 per cent, the South West up 1 per cent, the South East up 0.8 per cent and Greater London up 0.4 per cent