Two bits of data came out this month that, read together, tell a more interesting story than either does on its own.
Hamptons found that in June, for the first time since 2019, investors bought more homes than they sold. Investor purchases made up 10.2% of all sales, while previously-rented homes made up only 9.2% of listings.
Meanwhile TwentyEA calculated that almost 850,000 rental properties have left the sector over the past decade, one in five of everything that was ever let out, with 2025 alone accounting for around 181,000 of those exits.
So which is it? Are investors leaving in droves, or are they buying again? The honest answer is both, and the reason isn’t really about confidence coming back. It’s about the arithmetic of selling having changed.
Since 1 May, anyone using a Ground 1A notice to get a tenant out so they can sell now faces a mandatory 12-month ban on re-letting the property if they don’t manage to sell it. Hamptons looked back at last year’s listings and found that 51% of rental properties put on the market failed to sell, rising to 60% for flats. Run that failure rate through this year’s rules and you’re looking at somewhere between 80,000 and 100,000 homes that would have been stuck empty, unsellable and unrentable for a year, had the ban applied then. That’s a big risk to take so you can move your money somewhere else.
What that does, in practice, is change the value of the option to sell. A few years ago, if you’d had enough of a property, you served notice, got it empty, and put it on the market. Worst case, it sat empty a bit longer than hoped while it sold. Now, if it doesn’t sell, you can’t simply re-let it to cover your costs while you wait for a buyer. You’re locked out of your own income for twelve months. That’s a significant cost to have to carry, and presumably explains why sales have slowed even among investors who’d quite like to be out.
It’s also, I’d argue, part of the reason why purchases have picked up. The investors still active in this market are, on the whole, the more committed, better-capitalised ones – the accidental or half-hearted investors mostly left already, worn down by tax changes since 2016 and higher borrowing costs since 2022. The ones left standing are looking at yields that have improved, because rents have risen faster than prices over the last couple of years, and have decided that it’s worth buying and not exiting.
There’s a flat-specific wrinkle too. Flats made up 51% of everything investors marketed for sale last year, and in June, 24.4% of flats for sale had previously been rented, against just 7.8% of houses. Flats are also taking noticeably longer to sell, 85 days to go under offer against 59 for houses. There’s several reasons why this could be the case.
Government announcements, and dithering, about Leasehold Reform; on-going works to remove cladding; and maybe concerns around service charges. Whatever the reason, If you own flats and are thinking about selling, it’s worth building in some extra time.
I wrote a few weeks back about a reader asking whether he could still sell with a tenant in place after the Act came in. Short answer: yes, provided you’re not handing over vacant possession. This data adds a layer to that: selling to another investor with the tenant already in place sidesteps the whole Ground 1A risk, because you’re not evicting anyone. It’s always been possible to sell with a tenant in place, but it’s now potentially more attractive than selling with vacant possession, and worth moving up your list if an exit is on your mind.
In some ways, you are reducing your market because an owner occupier required vacant possession, and they won’t buy with a tenant in place. But selling to another investor at least reduces some of the uncertainty, IF you can find someone to buy and at a price you are happy with.
I guess the lesson from this data is, if you’ve been assuming that selling is always the simple, low-risk option and staying put is the one with all the uncertainty, this month’s numbers suggest that’s no longer necessarily true.
Here’s to successful property investing.
Peter Jones
Author, property investor and ex-Chartered Surveyor
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