The number of privately-rented homes in Britain, rented out by a landlord company, has risen to around 12% of the British market. Although small-scale “sole-trader” landlords still dominate the scene, there has been a steady move towards larger portfolio landlords owning their homes through a limited company.
The move, which is being propelled by tax changes introduced a couple of years ago by the then Chancellor, George Osborne, plus the growing build-to-rent initiative, is now said to be “professionalising”, the sector.
The motives behind the Government’s changes towards buy-to-let are still unclear: but some experts attribute them to a fear that buy-to-let was pricing out first-time buyers, that the buy-to-let market was growing too quickly, leading to extended mortgage debt and financial instability, and being dominated by small-scale landlords the industry was said to be harbouring too many rogues.
London landlords are the ones most likely to own a buy-to-let using a company structure, that’s according to the research carried out by Hamptons International. It found that around 12% of privately-rented homes across Britain were let by a company landlord in the first half of 2019 – this is the highest proportion recorded since 2011, when Hamptons say it was also 12%.
Hamptons, which uses its own data to make the calculations, says that in London around 13% of privately-rented homes are now let by company landlords. Hamptons’ theory is that the increase is due to the growing size of the rental sector.
Aneisha Beveridge, head of research at Hamptons International, has said:
“More than one in 10 rental properties are now owned by private companies, an indication that the sector continues to professionalise.
“Increasing taxation for private landlords combined with the growth of the build to rent sector has meant that more companies are letting homes than at any time since our records began.
“London, where landlords tend to have higher levels of debt and often the most to gain from corporate ownership, has the largest proportion of homes let by a company.
“However, it’s not always more profitable to put a buy-to-let into a company as other associated costs come into play.”
Hamptons International has published the following figures for region by region percentages of privately-rented homes let by company landlords:
|South (excluding London), 12%|