Property  

Buy-to-let has reduced housing stock over 25 years

Buy-to-let has reduced housing stock over 25 years
James Feaver via Unsplash

The buy-to-let market has “significantly reduced housing stock” for the past 25 years, according to London Money founder Martin Stewart. 

He said buy-to-let investments have contributed to reducing the number of houses available on the residential property market.

Stewart commented: “There are over 2.5mn landlords in the UK and 10 per cent of purchased homes are now for investment purposes.

“Both of these are enough in their own right to suggest that buy-to-let has significantly reduced housing stock over the past 25 years.”

Available housing stock has decreased since 2021, according to the latest research by GetAgent.

Its analysis has shown there is an average decrease of 12.5 per cent in houses listed per estate agency branch across Britain since last year.

People looking to move to the Exeter EX38 area, have seen the biggest reduction in house listings with a 93 per cent decrease in listings available per branch since 2021, according to GetAgent (see table, below).

The areas with the biggest decrease in homes listed per branch in 2022 versus 2021

Post CodeLocation / areaListings per branch - 2021Listings per branch - 2022Change - listings per branch 2021 vs 2022
EX38Exeter14.31-93.00%
LL15Denbighshire22.71.7-92.60%
ST13Staffordshire9.11-89.00%
IV36Moray9.31.1-87.80%
YO43East Riding of Yorkshire8.91.4-83.90%
NN13South Northamptonshire142.3-83.70%
PL15Cornwall27.54.6-83.40%
SK17Derbyshire Dales13.82.3-83.10%
WA7Halton10.31.8-82.80%
LA13Barrow-in-Furness19.83.6-82.00%

Source: GetAgent

Colby Short, chief executive of GetAgent, said: "With the market already suffering from a drought of its own with respect to available stock, a further reduction should ensure that the scales of supply and demand remain out of balance.

"As a result, property values are likely to remain robust despite the wider pressure of a cost of living crisis."

Last week, FTAdviser reported that property investors are spending an average of 1.2mn per property portfolio, according to research by Octane Capital.

At the time FTAdviser reported on the research, Octane Capital chief executive Jonathan Samuels said: “Portfolio investment offers advanced investors a far quicker path to scaling their portfolio and, as is often the case when buying in bulk, doing so can result in securing a greater level of value per unit."

Building portfolios boosts property investors

While buying full property portfolios is a popular way for buy-to-let landlords to increase their investments, there have been suggestions that landlords buying and selling full property portfolios to each other means this housing stock does not become available to residential buyers.

Paul Brett, managing director, intermediaries at Landbay, said: “There was talk earlier in the year that landlords might start selling, as interest rates started to rise, [but] this has not happened so far. 

“In fact, we are seeing many grow their portfolios and use their existing limited companies to do so.”

Supply and demand remains an issue for the residential property market.

Brett commented: “Of course, there is a supply and demand issue for residential homes, however the challenge here is applicant affordability.”

However, the effect of property portfolios on the property market is uncertain, according to Stewart.

Stewart commented: “I am not too sure there is enough data to ascertain the true impact of portfolio lending, especially when lenders themselves have different rules surrounding what is and isn’t a portfolio landlord.”