Spending on new buy to let homes is at the lowest level for five years, according to a new report by property consultants Hampton International. In the first six months of 2018, property investors spent £12.1 billion on homes to rent privately – the least since the same period in 2013, when the spend was £11.2 billion, according to the research.
In the past three years alone, landlord purchases are down 30 per cent – the total value of property purchased for letting has fallen by £5.2bn in this period, according to Hamptons.
Buy to let spending peaked in the first half of 2016, when the three per cent stamp duty surcharge on additional homes was introduced, reaching £21.2 billion.
Landlords purchased 64,260 homes in the first six months of 2018 – down 31 per cent on the first half of 2015.
The region with the largest drop in purchases is the South-East, where the gap was measured as a 45 per cent decrease over three years.
London landlords have also changed their investment strategy, with 61 per cent preferring to buy outside the capital, compared with 25 per cent in 2012.
Aneisha Beveridge, head of research at the firm, said: “The value of homes purchased by landlords has fallen by over £5 billion in three years. This is due to landlords buying fewer buy-to-lets and investors spending less on the homes they do buy. With two out of five London-based landlords looking outside the capital to buy in search of higher yields and lower stamp duty bills, the average price of a home bought as a buy-to-let has fallen by seven per cent since 2016.
“Rental growth continues to pick up. Rents rose in every region for the first time since January, while rents in London returned to growth for the first time in four months, fuelled by a pickup in Central London.”
Buy to let purchases by landlords since 2010
Source: Hamptons International