What does the buy-to-let bounce imply for renters?

There are more houses to rent than to buy. London is experiencing a rental market dilemma of declining stock levels and a post-pandemic rush back. With more people needing to get back into the city for work, there is a sudden rush to move. The rental housing issue may begin to ease in the upcoming months, as additional insights reveal landlords are once again acquiring buy-to-let properties. Citing Helen Crane For This Is Money, in the first quarter of 2022, landlords are growing their portfolios again. There are properties staying on the market for less time, selling faster and people are buying more properties than they are selling, indicating that the buy-to-let market is recovering. Between January and March of this year, property speculators acquired about 14% of all properties sold in the United Kingdom, a two-point rise over 2021 and the greatest observed since the boom of 2016.

Renters may be wondering what the buy-to-let bounce means for them. As per Hamptons in Standard.co.uk article, the growth in buy-to-let acquisitions might assist to reverse the rental sector’s slump. The sudden influx of tenants moving to London after the pandemic has aggravated the housing scarcity. This has resulted in a flat-hunting fervour, with auctions and viewing lineups becoming routine in the city. When compared to the same month in the previous year, the number of available rental homes in London decreased by 44 percent. Some of the most popular areas to reside, including Islington, Lambeth, Hackney, and Camden, witnessed a more than 50% reduction from the previous year according to the same article posted by Standard.co.uk  and the Evening Standard written by Ella Jessel.

In addition to this, the North East of England has been labelled the “buy-to-let capital of Britain”  In contrast to England and Wales, in which the gross rental return was just 6%, the gross rental return in London was 9%. Also, from Helen Crane For This Is Money article, although researchers anticipated investors to continue investing at a similar pace throughout 2022, it was uncertain to be enough to compensate for the complete loss of rental properties over the past five years, this was according to Aneisha Beveridge, head of research at Hamptons. Nevertheless, Hamptons’ studies also suggested that a sizable proportion of landlords continue to consider buy-to-let as a sound investment.