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Octane Capital’s analysis shows that if a string of legislative changes can eradicate the “amateur landlord”, the private rental market (PRS) level could drop by 383,600 units.
Oktein says it is estimated that 14% of UK rental property (BTL) is owned by amateur landlords who own only one rental property.
With an estimated average BTL property price currently at £285,915, the loss of that many homes would reduce PRS’s market value by £223.5bn.
PRS accounts for 18.8% of all dwellings, which equates to approximately 5.6 million homes in the UK.
An estimated 2.74 million landlords own this property, with each landlord owning an average of just over two properties.
However, Oktein suggests that this could lead to a “significant downturn” after the government made a series of legislative changes aimed at deterring investment in BTL by lowering landlords’ rate of return.
Octane says the move hit the “amateur landlord” the hardest.
Octane Capital CEO Jonathan Samuels says: “In recent years, the UK government has sought to eradicate the amateur landlord through a series of legislative changes aimed at reducing profit margins to help address the shortage of shares in the sales market. ”
“Firstly, this is an impractical and unwise decision when in fact more houses need to be built.”
“Secondly, the country’s tenants are paying the price, and the lack of inventory only increases the cost of rent.”
“If amateur landlords ceased to exist, this would further reduce PRS inventory levels by a significant amount and only exacerbate the problem.”
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