A million owner-occupied homes switch to lettings in a decade

Around one million homes that were owner-occupied in 2005 have in the intervening decade been sold and switched to being privately let by landlords - suggesting this may be one of the reasons behind a fall in owner-occupation in recent years. 

The data comes in an extensive report into the private rental sector prepared by Countrywide, the UK’s largest lettings agency.

“The rapid growth of the private rented sector has to come from somewhere - while the tenure may change, the physical home remains. The sector has been growing since 2005 but the number of homeowners has fallen in each of the last 10 years.  This scale of shift in tenure shows that the current push from the government to increase the number of homeowners is unlikely to be enough to reverse the decline” says Johnny Morris, director of research at Countrywide.

“Although landlords and first-time buyers might not appear natural bedfellows, because they tend to look for similar types of homes they do end up selling to each other. Many landlords face a choice 10 to 15 years after buying a home, between refurbishing the property or selling it. Those landlords who choose to sell up offer an opportunity to first-time buyers” he says. 

In addition to homes transferring from owner occupation to the private rented sector, the additional growth in the size of the lettings stock in the country is accounted for by landlords buying new builds - 700,000 new homes built since 2005 have found their way into the private rented sector.  

Morris says first-time buyers end up buying 65 per cent of the homes that leave the private rented sector, and last year alone some 45,000 first-time buyers bought their home from a landlord.