Given the demand for rental property, it shouldn’t be a surprise to learn that landlords and property investors purchased a greater proportion of property in 2022 than they did in 2021. At David Harris & Co, we know he significant demand for rental accommodation provides a significant incentive for buy-to-let investors, and we work closely with landlords to manage their rental property in the most effective manner.
As of early December 2022, 12.2% of property were purchased by investors. This is the highest proportion since 2016, and it marks an increase on the 11.7% figure which occurred in 2021. For those looking back to prior eras will see this proportion is smaller than the 2015 figure, of 15.5%, with 2015 being the final full year before property investors had the 3% surcharge to deal with.
While the proportion of investment purchases has increased, the drop in overall sales in the market means around 30,000 fewer homes have been bought in this way in the past 12 months.
Such was the demand for homes, and rental property, earlier in the year, many investors were snapping up property above the asking price. The peak of this came in April of 2022, with 48% of investor buyers purchasing at a price above the asking price. This was an activity which mirrored what happened in the traditional housing market.
As the year progressed, this proportion has fallen and in November, only 25% of investor buyers were agreeing to pay a fee higher than the asking price. In the same month, 30% of first-time buyers were paying above the asking price to step onto the property ladder.
Aneisha Beveridge, head of research at Hamptons, said: “Rising rents are tempting landlords to dip a toe back into the slowing sales market to try and pick up deals they couldn’t have got six months ago. With sellers more open to negotiation and rents rising rapidly, returns for equity rich landlords have been rising. While we’re unlikely to see landlords return to buying at pre-stamp duty surcharge numbers, it’s possible they may outnumber first-time buyers in some months next year, as was common before 2016.”
We know how challenging it is right now financially, and this means the rental market is likely to remain active for some time. If you are a landlord looking to enter the market, this is a good time, and we have the skills and experience you can rely on to make informed decisions. We can help you reach prospective tenants and manage property, so get in touch.
We have assisted many Finchley landlords connect with tenants, and we know where these groups are looking for rental property. You can take the stress out of connecting with your ideal tenant by turning to a local letting specialist in Finchley.
If you want to make an informed decision in and around Finchley’s letting market, we are here for you. If you have any questions about the local market, or you need assistance, please contact David Harris & Co today. Call us on 0208 346 9122.
