2nd
Aug 2024
The CEO of Zoopla Charlie Bryant says that landlords are finding it hard to make it financially worthwhile to stay in the sector and corporate landlords will become predominant in the private rental sector.
In a recent interview in The Telegraph he pointed out that smaller BTL investors are selling up to leave the sector because of higher mortgage rates, rising taxes, increasing costly regulations and the unfair excess stamp duty.
He states that they will be replaced by private equity firms and pension funds taking advantage of the ‘cash rich’ build to rent to sector.
He knows that the removal of tax relief on BTL mortgages along with the excess stamp duty charge on second homes rolled out in 2016 have caused many individual landlords to jump ship.
Bryant told the Telegraph: “Undoubtedly the next iteration [of the rental market] is, particularly with potential planning changes, will be larger, more corporate institutional landlords, under the build-to-rent guise.”
Stats from UK Finance backs up his view highlighting a shrinkage in the BTL mortgage sector last seen in 1996.
The corporates’ invasion coincides with Labour’s plans to open up planning rules and to build 1.5 million homes with no doubt involving corporate BTR investors.
The Build to Rent model has already been adopted into the private rental sector in Germany and the US which is rapidly increasing across the UK.
A property consultancy firm claims the number of BTR flats across the UK has rocketed from just 7,200 in 2015 to the present 90,000 plus, with another 90,000 on the horizon.
It should be taken into consideration that in spite of the growing numbers it small in comparison to 4.6 million households in the PRS.
Many property experts predict that Labour will be heavily reliant on build-to-rent’s contribution to the targeted 1.5 million homes over the next five years, as high immigration levels fuels rental demand even higher.
Mr Bryant said: “Net migration remains high. The UK remains a very, very popular destination for overseas students and migrant labour.
“We are still a very strong financial centre and therefore we get a lot of expats coming in.”
To take the housing crisis head on Mr. Bryant wants the government to build different types of housing developments including social and affordable rental properties.
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