--- title: Retiring landlords are pushing up rental yields, figures show description: Ritiring landlords are selling to owner occupiers, pushing up rental yields. Here's how. image: https://blog.brickowner.com/hubfs/Retiring%20rental%20yield.png --- The content of the financial promotions on this website has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000. Reliance on these promotions for the purpose of engaging in investment activity may expose an individual to a significant risk of losing all of the property or assets invested. - [Investments](https://app.brickowner.com/investments/) - [Open Investments](https://app.brickowner.com/investments/) - [Closed Investments](https://app.brickowner.com/investments/closed) - [How it Works](https://www.brickowner.com/how-it-works/) - [About Us](https://www.brickowner.com/about-us/) - Resources - [Blog](https://blog.brickowner.com/blog) - [Help Center](https://www.brickowner.com/help-center/) - [Contact](https://www.brickowner.com/contact/) [Sign In](https://app.brickowner.com/auth/login) [Join](https://app.brickowner.com/auth/join) - [Investments](https://app.brickowner.com/investments/) - [Open Investments](https://app.brickowner.com/investments/) - [Closed Investments](https://app.brickowner.com/investments/closed) - [How it Works](https://www.brickowner.com/how-it-works/) - [About Us](https://www.brickowner.com/about-us/) - Resources - [Blog](https://blog.brickowner.com/blog) - [Help Center](https://www.brickowner.com/help-center/) - [Contact](https://www.brickowner.com/contact/) [Sign In](https://app.brickowner.com/auth/login) [Join](https://app.brickowner.com/auth/join) [Property Investment](https://blog.brickowner.com/blog/tag/property-investment) # Retiring landlords are pushing up rental yields, figures show The ageing buy-to-let investors in the UK have enjoyed both [strong capital value and growth in rental yields](https://www.brickowner.com/help-centre/how-do-i-earn-income-and-capital-growth/) since 1996 when Buy-to-Let mortgages (BTL) were first introduced. However, these investors are now selling up and “retiring” from the sector. According to Hamptons, around [140,000 landlords sold their properties](https://www.hamptons.co.uk/research/articles/retirees-drive-landlord-sales#/) and "retired" last year, accounting for almost three-quarters of all sales by buy-to-let investors. Analysts expect this phenomenon to continue as around 96,000 landlords are turning 65 each year in the UK, on top of the 924,000 landlords who are already over 65. ## Shortage of rental accomodation means higher rental yields Rising mortgage rates, a stamp duty surcharge and additional red tape have deterred a new generation of BTL investors from this market. This means owner occupiers are purchasing these properties and, as a result, there is a shortage of rental accommodation on the market. The average two-year fixed mortgage rate for a landlord has risen from 3.0% to 5.6% in the past two years. For a £200,000 interest-only mortgage, this equates to the difference between paying £500 and £937 per month. These changes have led to an increase in the rents that tenants are being charged and therefore the rental yields properties offer. This combined with the efficiencies to be gained from investing in Build To Rent go some way to explaining why the BTR sector has grown so much, particularly over the last three years. ## **How much have rental yields increased?** Investment into UK BTR in Q1 2023 was £1.1B and investment into the sector has increased year-on-year for the last four years. Both supply and demand variables are driving the surge in rental demand, and resulting rent increases. There is a fundamental lack of supply of good quality rental stock available – this combined with the removal of the Help to Buy scheme and higher interest rates has led to consumers moving away from buying and renting instead. The average rent for a newly let home in the UK reached £1,236 per month in March 2023, marking a 10.8% increase from the same month in the previous year. This increase marks the second-fastest rise in any month after the 11.5% increase seen in May 2022. ## **Highest rental growth in the UK** London has seen rents increase the most, with average rents rising by 16.2% — faster than any other region in the country. Inner London saw an 18.5% rise over the last year, with rents exceeding £3,000 per month for the second consecutive month. Meanwhile, the average rent in Outer London increased by 15.6%, marking the fastest annual increase on record and taking the average rent to £2,013 per month. ## **Pressures driving up rental values** There are 64% fewer homes available to rent across the UK than there were in March 2019. Scotland is particularly hard-hit, with the number of homes on the market falling by 39% year-on-year, more than in any other region by at least 10 percentage points. As the supply of rental properties dwindles and prices rise, many tenants are finding themselves with limited choices when it comes to finding a new home. This has led to a 10% increase in the number of tenants moving home, according to Hamptons. While the slowing of house price growth may offer some relief to potential homeowners, it is likely to exacerbate the rental crisis by reducing the number of homes available for rent. In the absence of a significant increase in delivery of new homes across the UK, rents look set to remain strong for the foreseeable future.   ### Related Articles [Property Investment](https://blog.brickowner.com/blog/tag/property-investment) #### [Rising rental yields – a snapshot of the market in 2023](https://blog.brickowner.com/blog/retiring-landlords-pushing-up-rental-yields-0) 2 Min Read [Property Investment](https://blog.brickowner.com/blog/tag/property-investment) #### [Will further restrictions mean a lockdown in property prices?](https://blog.brickowner.com/blog/will-further-restrictions-mean-a-lockdown-in-property-prices) 2 Min Read ### Most Popular ### Topics - [Blog](https://blog.brickowner.com/blog) - [fintech](https://blog.brickowner.com/blog/tag/fintech) - [Investor Stories](https://blog.brickowner.com/blog/tag/investor-stories) - [Pensions](https://blog.brickowner.com/blog/tag/pensions) - [Property Investment](https://blog.brickowner.com/blog/tag/property-investment) - [Proptech](https://blog.brickowner.com/blog/tag/proptech) [![Brick Owner](https://blog.brickowner.com/hubfs/raw_assets/public/Brickowner_April2022/images/footer-logo.svg "Brick Owner")](https://www.brickowner.com/) [Sign In](https://app.brickowner.com/auth/login) [Join](https://app.brickowner.com/auth/join) ©2022 Brickowner - Our Company - [About Us](https://www.brickowner.com/about-us/) - [Contact Us](https://www.brickowner.com/contact/) - [Investments](https://app.brickowner.com/auth) - [About Us](https://www.brickowner.com/about-us/) - Help & Support - [How It Works](https://www.brickowner.com/how-it-works/) - [Help Centre](https://www.brickowner.com/help-centre/) - Legal - [Key Risks](https://www.brickowner.com/risks/) - [Privacy & Cookie Policy](https://www.brickowner.com/privacy/) - [Terms & Conditions](https://www.brickowner.com/terms/) **Capital at risk.** There is no compensation in respect of poor investment performance. 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