New research has identified what happens to properties sold by under-pressure landlords.
The overall result is of course a reduction in available rental homes, but not all properties immediately leave the Private Rented Sector (PRS).
Pegasus Insight says over a quarter of landlords who sold property over the past year did so with existing tenants in place.
Where this occurred, landlords typically sold an average of 1.8 properties with sitting tenants.
Around three in 10 properties were purchased by another landlord, suggesting that a proportion of divested stock stays in the sector.
However, the research also shows that a significant share of these properties are transitioning into owner occupation.
Over a third (34%) of landlord sales went to first-time buyers, and 29% to other residential buyers, meaning those homes leave the rental market altogether.
Taken together, the findings indicate that while some properties remain within the PRS when landlords sell, the balance of sales still points towards a gradual contraction in the overall supply of rental homes.
Mark Long, founder and director of Pegasus Insight, comments: “The overall direction of travel still points to a shrinking PRS. When a substantial proportion of landlord sales are going to first-time buyers or other owner occupiers, it inevitably reduces the pool of homes available for rent.
“Policymakers must recognise the cumulative impact of ever tighter regulation and rising taxation on landlords, particularly smaller operators.
“Many are deciding that the pressures and uncertainty are no longer worth it.
“This is significant because the PRS provides homes for around 20% of the UK’s households, so policy decisions affecting landlords ultimately have consequences for tenants too.”
This article is taken from Landlord Today