The property market has been through a challenging few years in the UK. With fluctuating interest rates, the cost of living crisis, and a number of other challenges, there has been some periods of seriously high activity, along with times where almost no one is selling at all.
In the past few months, it has been suggested that landlords are starting to sell their flats at an increased rate. But is this true – and if so, why is it happening? In the below, we’ve looked at the statistics and given a clear answer to these questions. Keep reading to find out!
Are Landlords Selling Their Flats?
Yes, a trend has emerged over the past year of more landlords than usual in the UK selling their flats. For the first time in seven years, landlord sales have outstripped purchases in the UK, and figures from Hamptons state that landlords sold 35,000 more properties than they bought across 2022.
Why Are Landlords Selling Their Flats?
There are a number of reasons which explain why landlords in the UK are selling their flats at increased rates.
Firstly, inflation since the end of 2021 has seen interest rates increase on several occasions. This means that mortgage repayments are getting continually more expensive, and not all landlords are able to afford it.
Secondly, the ‘cost of living crisis’ in the UK provides another financial challenge for landlords, and means that some of them are required to sell their flat fast. Even people who own property are not immune to financial difficulties, and if they are struggling to pay off their loans, or afford daily costs such as petrol and food, then a simple way to unlock more cash is by selling one of their properties.
In light of the two significant challenges listed above, if some landlords have an extensive property portfolio, then they may choose to sell off their flats because these can sometimes be the least profitable when making a sale (compared with houses). Over several years houses can grow in value significantly, meaning that they can be sold for a much larger profit. In comparison, flats do not tend to increase in value so much, especially since new ones are often being built in nearby residential areas. This has caused some landlords to give notice to tenants that they are selling the flat.
Finally, the UK government has released increased legislation in recent years which adds to the headaches associated with owning a flat for landlords. While these new laws are designed to protect tenants and ensure that all their needs are being met, the increased costs associated with meeting these conditions, as well as the hassle of jumping through all the required hoops, means that some landlords can simply do without the stress.
What Impact is this having on UK Renters?
For renters in the UK who are looking for a place to stay, the increased number of flat sales by landlords presents a problem. Those who cannot afford to buy a property outright (especially during the current period of financial challenges) must therefore find other ways to find a flat on the market, and achieve success in their tenancy application.
Firstly, lots of UK renters are looking beyond their usual location preference when searching for flats. It is no longer always possible to be close-minded about where you want to live – and if this means moving further away from a city centre, or living on a road that wouldn’t usually be ideal, then this is a sacrifice which many tenants are having to make.
Some renters are also having to find new living arrangements – for example, moving back in with their parents, or living together with a friend/partner when they otherwise wouldn’t choose to do so. Living with other people generally makes the monthly payments more affordable, and therefore this is a solution which many UK tenants are having to accept.
Finally, there are new types of rental housing emerging in the UK which are becoming increasingly popular. Build-to-rent and co-living properties are in planning or construction across the UK which are developed specifically for renters, and come with professional management and multiple added benefits for tenants. These additional options can make it easier for renters to find a place to stay.
Nevertheless, even with these creative solutions for UK renters, conditions are still not ideal and compromises are having to be made.
Buying a flat in the UK
If you are looking for a place to stay in the UK, and cannot find a suitable flat to rent, then perhaps you should consider buying one outright. While not everyone has the financial capability to afford doing this, if you are able to do so, it is certainly worth consideration.
Ideally, you will speak to property experts and financial experts before making a decision about this. There are lots of pros and cons to consider, some of which can vary depending on the location you are buying in. Make sure you do thorough research and consider all your options. Cash house buyers like We Buy Any Home are here to help to sell flat fast. Get a free, instant cash offer on your property today.