Over a quarter of flats currently available for sale were previously rented out, as landlords continue to divest properties, according to an analysis by Thisismoney using Hamptons data. This figure, at 26.7%, marks an increase from 16.3% recorded at the same time in 2018. For terraced houses, the proportion of previously let properties on the market has risen from 10.3% to 13.1%.
Nicholas Austin, a branch manager at RiverHomes in South West London, stated that landlords are exiting the market due to factors such as the Renters’ Rights Act, high service charges post-Grenfell, and other rising costs, which he believes have made buy-to-let unprofitable for many amateur landlords. He added that first-time buyers, who would typically purchase flats, are either struggling with mortgages or avoiding flats altogether.
The situation is particularly pronounced in some city centres. In Birmingham’s B1 postcode, PropertyData indicates that 61% of flat sellers have sold at a loss over the past year. Philip Jackson of Maguire Jackson estate agents noted that higher mortgage costs, service charges, maintenance bills, and management costs have affected investors who bought flats over a decade ago.
Flat values have seen a modest increase of just over 10% since 2016, in contrast to a 43% rise for houses, according to Zoopla figures. Hamptons data also shows that 22% of flats sold after a price reduction of at least 10%, compared to 13% of houses. A typical flat now costs £193,000, while a house is priced at £327,000.