Landlords still selling off property, but total number of rentals stable: Land Registry

Investors sold more homes than they bought in the third quarter of this year, the Land Registry reports. This trend has been going on for some time, as new government regulations make rental activities less attractive. The increased transfer tax, purchase protection, new rules in box 3, and the Affordable Rent Act all impact landlords’ income. Despite the sell-off, the total number of private sector rentals remained relatively stable thanks to new construction.

Both the number of purchases and sales by investors have increased since the beginning of the year, but in July, August, and September, the number of homes sold increased more than those purchased. Investors sold 57 percent more homes and bought 22 percent more homes compared to the same period a year earlier.

Investors sold 12,200 homes in the third quarter, approximately 250 more than in the previous quarter. Small private investors, in particular, sold more homes. Business investors sold 5 percent fewer homes compared to the previous quarter.

In the four largest cities, Amsterdam, Rotterdam, The Hague, and Utrecht, private investors sold over 1,700 homes and bought fewer than 300. Business investors sold just as many homes and bought around 750. According to the Land Registry, the introduction of purchase protection in those cities played an important role in the decrease in the number of purchases, because these rules prevent investors from buying certain homes.

Despite the sell-off by smaller, private landlords, the total number of rental homes in the private sector remained stable thanks to commercial landlords building new homes. “The total stock of rental homes, therefore, remains relatively the same for the time being,” Land Registry researcher Lianne Hans told NOS. “New construction compensates for sales by private investors.”

On October 1, there were 767,100 rental homes owned by profit-making landlords. That is slightly more than a year earlier when the counter stood at 766,500. Private landlords owned 11,200 fewer homes than a year earlier, but commercial landlords owned 11,800 more, mainly due to new construction.