More 80,000 homes have been added to the rental market during the past year by “accidental landlords”.
Some one in 12 homes that had failed to sell for six months or more in the slowing property sector were put up for rent by frustrated vendors, new research shows.
Countrywide, one of the UK’s leading agents, says it is the third year in a row it has seen accidental landlords rise – providing more evidence that while properties prices remain high, the number of sales is slowing.
London had the biggest concentration of accidental landlords, with 12.5% of new rents in 2017 being up for sale previously, while in Scotland, this figure was just 5.6%.
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.”
Countrywide also reported rents rose year-on-year across the whole of Britain, after turning positive again in London.
The biggest growth in rents was in the Midlands with a rise of 2.8%, followed by Northern England up 2.3%, Scotland up 1.7%, Wales up 1.6%, the East of England up 1.2%, the South West up 1%, the South East up 0.8% and Greater London up 0.4%.
While the increase in the supply of rental homes helps prospective tenants, accidental landlords tend to stay in the market for a much shorter time than traditional landlords.
The average buy-to-let investor owns a property for 17 years, but accidental landlords typically rent their home out for just 15 months.
Nine out of 10 accidental landlords also put their property straight back on sale as soon as their first tenant moves out.
Morris added: “Rental growth in London is once again positive. Every region of Britain now has average rents higher than a year ago and it likely that relatively low numbers of rental homes coming onto the market will keep rental growth firmly in positive territory.”
The report coincides with one from property website Rightmove which is predicting house prices across England and Wales will rise by 1% in 2018, but there will be a further decline in London.
In its annual report on the market, Rightmove says 2% price falls in the capital will be more than offset by an increase in the value of small and medium-priced homes around the country.
The average asking price for an English or Welsh home stands at £302,865 – a 2.6% fall on November, but 1.2% higher than a year ago.