What the Surge in Rental Homes for Sale Means for You
Are you hoping for the chance to own your dream home, or are you an investor looking for your next property opportunity? For those looking to purchase a property, the tides are changing and a record number of former rental properties are being listed for sale. This may be an opportunity for first-time buyers and investors.
In this article, we’ll examine why landlords are selling their rental properties and what this means for buyers. We will also give tips on making the most of this. We will offer insights into the current market and some actionable tips to help you take the next step towards your property goals.
What it Means for You
The housing market is buzzing with a new trend that could benefit buyers. As of September 2024, 1 in 5 homes for sale was previously rented out – up from 8% in 2010. London is an even hotter market for this, with 1/3 of new properties for sale being former rental properties.*
While this represents a possible risk to tenants who rent houses or apartments, who may lose their homes if their landlords sell up, experts at Rightmove and experienced estate agents hesitate to call it a landlord “Exodus.” Only time will tell whether these changes are a sign of a fundamental shift in the property market.
For first-time buyers, this means more choice and potentially lower prices due to increased supply. For investors, this means the opportunity to buy property to rent to tenants at a good price, often in a great location, with amenities on their doorstep like schools, shops, or a train station.
Several things are working to create this environment.
*Quote source – Rightmove.co.uk, 5th September 2024
Why are Landlords Selling Their Rental Properties?
Landlords are selling their rental properties due to a mix of rising costs, changing legislation and tax implications. Here’s a breakdown of each:
Rising Costs and Taxes
Running a rental property is getting more expensive. The price of maintenance costs has risen, utility bills and service charges are up and everyday costs are up due to inflation. Some landlords are feeling the pinch and selling their property rather than continuing to rent it out.
Legislative Changes
Various changes in legislation aimed at protecting tenants have begun to create complications for landlords. Stricter safety regulations, more tenant rights and rent controls mean managing a rental property is now more complicated and more expensive than before.
Capital Gains Tax Rumours
The anticipation of increased Capital Gains Tax is another big factor. Landlords are worried that upcoming tax changes will further eat into their profits so many are deciding to sell.
What does this mean for First Time Buyers and Investors?
With more rental properties coming to market, first-time buyers and investors have a unique opportunity to find their dream home at a good price. Here’s how to make the most of it:
More Choice for First-Time Buyers
First-time buyers can benefit from the increased property supply by finding a home that fits their needs and budget. With more homes to choose from they can be more selective and potentially negotiate better deals
Investment Opportunities
For property investors, this trend offers excellent potential. Properties that were once rental homes often come with established neighbourhoods and tenant-ready features so are great for flipping or continuing to rent out.
Despite the potential risks suggested by the new data, buy-to-let is still considered a good investment. This trend could offer investors who wish to rent out new properties a chance to find properties for sale at a competitive price.
Potential Value Appreciation
Since these properties were once rentals they can be in areas of high housing demand. Buying in a desirable location now could mean big value appreciation in the coming years as the market settles.
How can a mortgage broker help?
Buying a property in a changing market can be complex, but that’s where a mortgage broker comes in. Here’s why getting a mortgage broker could be the smartest move:
Expert Advice
A mortgage broker can give you expert advice tailored to your financial situation and property goals. They know the market and can help you find the most suitable deals and financing options.
Access to Exclusive Deals
Mortgage brokers have access to multiple lenders and can often find more suitable mortgage products than you may be able to do on your own. This will save you money upfront and over the life of the mortgage. Eden Hawk Financial Solutions secure access to a market representative of the whole of market due to being part of the Quilter Financial Planning network.
Simplified Process
From pre-approval to completion, a mortgage broker can make the home-buying process more straight forward. They do the paperwork and negotiations so you can find your dream home or investment property.
Final Thoughts
Landlords listing their rental properties for sale could be a sign of a change in the market. While it could create volatility for tenants wishing to rent, it may also create opportunities for prospective home buyers and investors.
For first-time home buyers, it’s an opportunity to get into homeownership with more choices and better deals. For investors, it’s a chance to add to their portfolio with properties that can appreciate in value.
You can get the most out of the market by understanding these trends and using a mortgage broker. Get in touch with Eden Hawk Financial Solutions today to get started.
Some Buy to Let mortgages are not regulated by the Financial Conduct Authority