Why is the number of ‘accidental landlords’ on the rise?
Around 80,000 properties were put up for rent after failing to sell in 2017, adding to the stock of rental housing across the UK.
Accidental landlords own one in 12 of the homes that came onto the rental market this year, according to research from Countrywide, a figure that has grown for the past three consecutive years.
The data looked at properties across Britain that had been listed for rent after having been put up for sale within the previous six-month period.
Accidental landlords in London owned 12.5% of new rental homes in 2017, the highest proportion in the country, compared to Scotland where only 5.6% of rental properties had previously been on the market for sale. According to Countrywide, this was down to the fact that the sales market was tougher in the capital than elsewhere in the country.
However, it still hasn’t reached the peak level seen back in 2010, when 11.2% of rental homes in the UK had previously been advertised for sale.
The difference between investment and accident
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.”
While buy-to-let landlords tend to own their rental properties for an average 17 years, accidental landlords only keep theirs for an average of 15 months – often selling after the first tenant moves out.
Homeowners who are unable to sell before purchasing a new property – perhaps due to being part of a chain – can sometimes convert their mortgage on their existing property to a “let-to-buy” in order to release equity for a deposit on the new home, and rake money back through renting. This can be a temporary measure, but could become permanent if the accidental landlord decides to keep hold of their first home.
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