Landlords are expanding their portfolios by acquiring more lower-value properties, according to analysis from Inventory Base.
The analysis indicated that landlords were focusing on increasing the number of properties they own rather than downsizing, in response to economic pressures and Government policies.
In Q2 2024, the average landlord’s portfolio increased to 7.6 properties, a rise of 5.6% from 7.2 properties in Q1 2024.
However, the average value of individual properties decreased from £250,000 in Q1 to £223,684 in Q2, marking a 10.5% drop.
As a result, the overall value of the average portfolio fell from £1.8m to £1.7m, a decline of 5.6%.
Despite the reduced total value of portfolios, landlords are benefiting from higher rental prices.
According to Rightmove’s Rental Price Tracker, the average rent in Q2 2024 – excluding Greater London – was £1,314 per month, reflecting a quarterly increase of 1.8% and an annual rise of 6.8%.
This scenario led to an increase in rental yields, which rose from an average of 6.1% in Q1 2024 to 6.3% in Q2.
Siân Hemming-Metcalfe, operations director at Inventory Base, said: “Whether it’s increases to capital gains tax, higher Stamp Duty, soaring interest rates, or even the proposed Renters’ Rights Bill, UK landlords have been through a lot.
“The challenges just keep piling up. But despite these pressures, landlords are finding ways to adapt to their ‘new normal’.
Hemming-Metcalfe added: “It was widely predicted that these pressures would force landlords to sell up and exit the rental sector, but the reality tells a different story.
“Instead of stepping away, landlords are showing resilience and adaptability.
“By finding ways to navigate the challenges, they’re ensuring their properties continue to play a vital role in the housing market.
“Landlords, or the management agents they trust, should look to the growing range of tech solutions available.
“From CRM’s to inventory reporting solutions, these innovations and integrations can simplify operations, improve efficiency, and even reduce costs.”
