Data showed that almost a fifth (18%) of homes were previously available to rent, up from 14% a year earlier, and 8% in 2010
Fears that capital gains tax may be increased in the autumn budget could be driving more landlords to sell up, data from property portal Rightmove suggests, as the proportion of former rental homes going up for sale has hit a record high.
The data showed that almost a fifth (18%) of homes were previously available to rent, up from 14% a year earlier, and 8% in 2010.
Rightmove said that one potential driver is a mooted increase in capital gains tax (CGT) in the government’s budget on 30 October. The tax is levied on profits made from the sale of assets, such as a second home.
There is currently a £3,000 tax-free allowance on capital gains, after which there is an 18% CGT applied on residential property sales for basic rate taxpayers and 24% for those in the higher rate tax band. The Treasury has reportedly drawn up plans to align capital gains rates with income tax.
The trend was most prominent in London, where almost a third (29%) of all homes for sale were previously available on the rental market. That was followed by Scotland, where 19% of former rental homes were going up for sale.
Rightmove said that this trend had been slowly rising for many months, and that the previous five-year average for homes switching from the rental into sales market was 14%. It also pointed to a jump in new seller activity following the BoEs interest rate cut in August for the first time since March 2020.
Tim Bannister, property expert at Rightmove, said: Despite the trend of more landlords choosing to sell up, it does not seem to be a mass exodus, and we will need to monitor the longer-term impacts of what happens to the rental supply that is put up for sale.
He said these homes could provide FTBs with more choice.
They might also be bought by other landlords and put back into the rental market, which would signal a changing of the guard rather than a complete exit from landlords, he said.
