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17/12/25 3:30 pm
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Nearly a third (31%) of homes for sale in London on Zoopla are former rented properties, prompting fears that more landlords are starting to quit the sector.
The figure is almost three times the average across the rest of the country (12%) which, although doesn’t add up to an exodus, reflects a business environment for landlords that remains challenging, according to Zoopla director of research, Richard Donnell.
Speaking on Radio 4’s You and Yours programme, Donnell said these ex-rentals were being snapped up by first-time buyers because many were in a relatively poor condition. “That’s the perfect property for a first time buyer,” said Donnell. “They want a three-bed house that’s 20% cheaper than the market so they can do it up.”
He explained that renters might get better value for money next year owing to a drop in demand for rented homes due to lower migration and more people buying properties, meaning that the number of homes for rent had increased by a fifth in the last year.
There were the same number of private rented homes in Great Britain as in 2016, said Donnell who added: “That tells us landlords leaving are being replaced by people coming in, but the overall size of the PRS has been static for a decade, having doubled in size in the decade before 2016. It has gone from a rapid growth phase to stalling growth - if supply is static and demand goes up then rents increase.”
He explained that some renters could soon be in for a shock. “Where landlords might not have increased the rent because rents really weren’t rising much until 2020, all of a sudden it becomes more painful if a landlord hasn’t put rent up then resets you to the market level.”
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