According to the report, the figure has risen to almost a fifth (18%) during H1 2018 and is the highest proportion since Hamptons records began in 2010. This is up 4% on H1 2017 and up 8% since H1 2016 when just one in ten homes were let by a company landlord.
The numbers have been steadily rising since H1 2015 when the Chancellor announced changes to tax relief on rental properties in the 2015 Spring Budget. The changes meant that it became more tax efficient, in some cases, for landlords to own their buy-to-let portfolios through a company rather than hold as a personal asset.
Yorkshire and the Humber had the highest proportion of rented homes owned by a company landlord. One in four (25%) homes let in Yorkshire and the Humber in H1 2018 were owned by a company landlord, followed by one in five (20%) in the North West and 19% in London. Last year, London topped the list but has since fallen back.
Company landlords are more likely to rent out cheaper homes than individuals. Over a third (35%) of homes let by a company landlord cost under £500 pcm, compared to 19% of homes let by individuals. Only 2% of homes owned by a company landlord were let for more than £2,000 pcm so far in 2018. One in ten rented homes owned by a company landlord were registered overseas.
The average cost of a new let in Great Britain rose to £956 pcm in June 2018, but rental growth slowed to 0.7% down from 1.3% in May. Rents rose the most in Wales, up 4.1% year-on-year, followed by the East (2.3%) and the Midlands (2.2%). Rents in the North were flat year-on-year following two consecutive months of falls.
Aneisha Beveridge, Analyst at Hamptons International, said: “The number of rented homes owned by company landlords continues to rise. Nearly one in five homes let so far this year were owned by a company landlord, almost double the proportion in 2015, before the tapering of mortgage interest tax relief changes were announced. Companies are generally taxed more favourably, so in many cases landlords can make cash savings by operating through a company rather than as an individual.
Rental growth slowed in June, falling below 1% for the first time in seven months as the shortage in stock begins to level out. The lull in landlord purchasing activity following the stamp duty surcharge for second homes appears to have bottomed out as investors find new ways to make their returns.”
