The number of accidental landlords has increased as homeowners struggle to sell their homes, new research has suggested.
One in 12 homes that came onto the rental market this year had been for sale within the previous six months, the equivalent of 80,000 properties, according to research by Countrywide.
It is the third consecutive year that the proportion has increased, although it remains well below the previous peak in 2010 when 11.2 per cent of homes that came onto the rental market had previously been put up for sale.
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Does your area have a high proportion of accidental landlords?
For many who have tried to sell their home over the past year, it will come as no surprise that the number of accidental landlords varies significantly from region to region.
London has the greatest proportion of accidental landlords. This year, 12.5 per cent of homes in London coming onto the rental market had previously been up for sale. It’s the highest figure since Countryside’s records began in 2007, surpassing the previous 12.1. per cent peak in 2010.
However, outside of the capital, things look rather different. In Scotland, for example, only 5.6 per cent of new rental homes had been up for sale during the past year.
Countrywide attributed the contrast to a stronger sales market outside of the capital, saying would-be sellers across the rest of Britain are far less likely to resort to putting their homes up for rent.
How long do accidental landlords rent out their properties for?
Unlike buy-to-let investors, the research found that accidental landlords tend to stay in the rental sector for a much shorter period of time.
While the average investor owns their rental property for 17 years, the typical accidental landlord rents out their home for an average of only 15 months. And 89 per cent of accidental landlords put their property back up for sale after the first tenant moves out, rather than looking for a new tenant.
At the same time, the annual rate of rental growth picked up in November, with the cost of a new let across Britain rising 1.2 per cent in the last 12 months, or 1.6 per cent outside London.
However, rents in London are growing more slowly than anywhere else in the country. Rents in the Midlands are growing at 2.8 per cent and at 2.3 per cent in the North of England.
Average rents on the rise across the UK as sellers can afford to wait
Johnny Morris, research director at Countrywide, said: “While most landlords are in the business by choice, the last three years have seen an increase in the numbers letting out a property they had previously tried to sell.
“With mortgage rates remaining low, these discretional sellers can afford to let their home, while they wait and see what the future holds for the sales market.”
And not only is it worth the wait to secure a good price for your property, the income in the meantime is not to be sniffed at. Morris added “Rental growth in London is once again positive. Every region of Britain now has average rents higher than a year ago.”
What do you think about the rise in accidental landlords? Let us know in the comments.