Renters are leaving London at the highest rate in a decade, fresh research shows.
In 2022, 40% of tenants who were moving home chose to leave London, up from 28% 10 years ago.
The 90,370 tenants leaving London last year compares to 62,210 homeowners moving out.
Most are moving to neighbouring areas, including east Surrey, Essex, Kent and Hertfordshire.
Around 38% of escapees have headed to the Midlands and the North, up from 27% in 2019.
“We expect the number of renters leaving the capital to continue rising for the foreseeable future,” said Hamptons.
Leavers tend to be in their mid-to-late 30s and from the least-affluent corners of London, said Hamptons.
Many renters have been priced out of living in London, with average rents in the capital up 9.1% year-on-year, as landlords pass on higher mortgage borrowing costs.
“While the commuter belt is often prohibitively expensive for would-be first-time buyers, the number of homes on the market here has increased faster than in the capital this year, tempting tenants to cross the M25,” Aneisha Beveridge, head of research at estate agent Hamptons, said.
She added that work was less likely to affect the decision to move compared with five years ago, as renters are keeping jobs where they can work remotely and only commute into the capital occasionally.
The number of tenants leaving London is expected to continue rising as rent prices increase, owed in part to the widening supply-demand imbalance in the market.
Hamptons says that landlords are exiting the PRS at the highest rate in three years, resulting in 66 fewer properties on the rental market per day in 2022.
Landlords sold 35,000 more properties than they bought in 2022, marking a 17% surge in net property losses compared to 2021, with landlords making up 16% of property sales last year and a mere 13% of purchases.
Soaring mortgage prices resulting from the Bank of England’s rate hikes, combined with unfavourable tax changes, have been cited are core reasons behind the exodus.
Buy-to-let rates have doubled in the past year; HSBC’s two-year fixed rate on a 60% loan-to-value mortgage, for instance, currently has a 5.49% rate followed by a 6.35% variable.
David Fell of Hamptons predicted that landlords are likely to continue selling more properties than they buy in the year ahead.
Comments (3)
So “Soaring mortgage prices resulting from the Bank of England’s rate hikes, combined with unfavourable tax changes, have been cited are core reasons behind the exodus”. What about the Elephant in the room, the renter’s reform bill that could leave you with non-evictable tenants and having to go to court to sell your own property if you need to evict tenants to get the best price. What about the EPC regulations that will lumber many especially lower rental end landlords with an average of an £8,000 bill to comply? Also what might labour have up their sleeves for the PRS if they get in? Existing landlords may decide to “tough it out” or “bury their heads” hoping for the Government to see sense but anybody thinking of becoming a landlord is hardly being encouraged at the moment.
The opposite of an article in Letting Agent Today, “A quarterly survey by specialist finance firm Landbay shows that 42 per cent of landlords say they will purchase additional property in the next 12 months, and amongst those landlords a strong 79 per cent state they will not sell any existing units.”
Having had one of my Buy2Let mortgages increase by a hefty £50+ for the sixth time, I will be joining those selling. We are told we are a business, yet taxed on turnover rather than profit. We are bashed by Polly Bleat, Alicia Kennedy and MPs of all parties. Well, since they think they can do a better job, let them.
A badly thought-out campaign by Shelter doing the opposite.