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NEW: Former rental properties now account for 11% of homes for sale

More than 1 in 10 (11%) homes for sale on Zoopla are former rental properties after private landlords '� faced with tax changes and higher borrowing costs '� have rationalised their portfolios or quit the market.

Before the pandemic, half of these homes for sale returned to the rental market as unsold or were bought by an investor, according to the platform's latest rental market report.

More recently, the number returning has dropped to 30% meaning that more homes are lost from the rental market than can be replaced by the flow of new investment.

The level of homes for rent remains stuck 20-40% below pre-pandemic levels in most regions, creating further competition between renters and adding extra impetus to rental growth, according to Zoopla.

It believes only an increase in new investment from corporate and private landlords will boost rental supply enough to moderate rental inflation.

shrap slowdown

It adds: 'A sharp slowdown in the sales market could also boost supply. It would mean fewer landlord sales and more owners pushed to renting out homes they are unable to sell.'�

Higher borrowing costs are hitting the 20-30% of landlords with the highest LTV mortgages hardest which, in turn, increases the likelihood of a sale as they approach refinancing, says   Zoopla.

Its data on landlord sales shows a clear concentration in London and the South East, accounting for 51% of the total.

The report reveals that UK rents have soared during the last 21 months, growing faster than earnings and now account for 28.3% of average pre-tax earnings. As a result, it finds that 8% of renters are falling behind with payments, up from 4% in the last six months.

Zoopla Executive director Richard Donnell (pictured) says: 'The chronic imbalance between supply and demand continues to push rents higher but we expect increasingly stretched affordability will start to reduce the pace of rental growth into 2024.'�  


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