Eradicating ‘amateur landlords’ could wipe £224bn from PRS value: Octane – Mortgage Strategy
If a consistent string of legislative changes succeed in eradicating the ‘amateur landlord’, private rented sector (PRS) market stock levels could reduce by 383,600, Octane Capital analysis reveals.
Octane says it is estimated that 14% of the UK’s buy-to-let (BTL) landlords are ‘amateur landlords’, owning just one rental property.
With the estimated average price for a BTL property currently standing at £285,915, losing this many homes would reduce the PRS’s market value by £223.5bn.
The PRS accounts for 18.8% of all dwellings, which equates to around 5.6m homes in the UK.
It is estimated that these properties are owned by 2.74m landlords, with each landlord owning an average of just over two properties.
However, Octane suggests that this could see a “significant decline” after the government introduced a string of legislative changes designed to deter BTL investment, by reducing landlord profit margins.
Octane says this move has seen the ‘amateur landlord’ hit hardest.
Octane Capital chief executive officer Jonathan Samuels says: “In recent years, the UK government has looked to eradicate the amateur landlord via a string of legislative changes, designed to dent profit margins in order to help address the shortage of stock within the sales market.”
“Firstly, this is not a practical or reasonable solution when really the answer is to build more homes.”
“Secondly, in doing so, it’s the nation’s tenants who are paying the price, with a shortage in stock only driving the cost of renting ever higher.”
“Should amateur landlords cease to exist, it would further reduce PRS stock levels by a significant amount and only exacerbate the problem further.”