Landlords sell more homes to owner-occupiers as investor interest declines

Most homes sold by landlords are now being purchased by owner-occupiers instead of other investors.

According to research by Hamptons, in 2024 more than 80% of properties sold by landlords were bought by owner-occupiers rather than investors.

The data reveals only 18% of homes sold by landlords are bought by another investor —a drop from 27% back in 2016.

Landlords downsizing portfolio

According to data from Hamptons, first-time buyers are having a record year, accounting for 35% of homes sold by investors. This marks a significant increase from just 11% in 2019 and 22% in 2020.

Aneisha Beveridge, head of research at Hampton, says it’s not surprising that landlords are not investing as the rental market faces increasing challenges.

She said: “Only 18% are bought by another investor a figure that’s been gradually drifting downwards over the last few years as there have been fewer investors looking to expand and set up new portfolios.”

Ms Beveridge adds that while the argument is often made that it’s a good thing to see first-time buyers purchasing former rental properties, this doesn’t fully address the housing supply issue.

She said: “There’s often an argument that it’s great if first-time buyers purchase all the homes owned by investors.  However, it’s worth remembering that rental homes tend to have more people living in them, so this doesn’t solve the issue as such.

Ms Beveridge adds: “First-time buyers are acquiring the most ex-rental homes in London, with 56% of these properties going to First-time buyers. This is predominantly because lower yields in the capital mean there’s less competition from other investors.

“Meanwhile, investors remain more active in the North, so more ex-rental homes are staying in the rental market there. In the North East, for example, only 18% of ex-rentals are being bought by first-time buyers.”

Reducing incentive to sell

The Hamptons data also reveals a decline in the number of flats being sold by landlords. The share has dropped from 48% in 2015 to just 40% this year.

Ms Beveridge says: “The share of flats being sold by landlords has been decreasing, which is a trend we’ve seen play out across the market.

“This is likely because some of these flats owned by landlords might be worth less than what they were bought for, particularly if they were bought in the last five years, reducing the incentive to sell.”

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