Goodlord’s State of the Industry Report has revealed key insights revealing current levels of industry optimism.
Opinions are split when it comes to the future of the industry. A sizeable proportion of respondents, 40%, said they felt either “pessimistic” or “very pessimistic” about the future. This is a marked increase in negative sentiment towards the industry’s future; when asked six months ago, only 23% said they felt pessimistic about its future, highlighting the impact recent changes have had on confidence.
However, nearly as many respondents (34%) feel either “somewhat optimistic” or “very optimistic” about the future of the lettings industry.
In contrast, the survey reveals that a much higher proportion - 56% - currently feel “very” or “somewhat” optimistic about the future of the agency they work for. However, this is slightly down from the 60% who felt optimistic six months ago.
At the other end of the spectrum, 23% of respondents said that they felt either “pessimistic” or “very pessimistic” about the future of the agencies they worked for, compared to only 5% six months prior. The impact on revenue from the Tenant Fee Act was cited as a common concern by respondents. Additionally, 31% of agents said they were concerned about making ends meet and the same number cited worries about suppliers increasing their prices in 2020.
The report also reveals that 8 in 10 agencies have reported a drop in revenue since the Tenant Fee Act was introduced last year.
More agents would also consider selling their agency than six months ago. Thirteen percent of survey respondents said that they would “definitely” consider selling their agency if the opportunity presented itself, up from 5% six months ago, with a further 26% saying they would “probably” consider selling, up from 10%. Respondents from larger agencies (more than 1,000 managed properties) were more likely than respondents from small or medium agencies to consider selling their agency.
Only 16% of survey respondents said they would “definitely” consider buying another agency if the opportunity presented itself, down from 29% who said the same six months ago. A quarter of survey respondents (25%) said they “definitely would not” consider purchasing another agency if the opportunity presented itself, up from 12% six months ago. Respondents from medium-sized agencies were the most likely to consider buying another agency if the opportunity presented itself.
Property market volumes are cited as one of the biggest worries for agents in 2020, with 41% of agents predicting it to present problems. Many agents said they were worried about landlords leaving the market due to increased legislation, or investors “giving up” on the buy-to-let market.
Keeping up with the pace of change in the lettings industry is impossible, with 11% of respondents saying they “definitely agreed” with this sentiment, and a further 43% saying they “tended to agree” with this sentiment. Only 6% of respondents said that they “definitely disagreed”.
Tom Mundy, COO at Goodlord, comments:
“With revenues for 85% of agents hit by Tenant Fees Act, it’s no surprise that many are expressing concerns for the future. Whilst a significant proportion are currently pessimistic about the future of the industry, it’s heartening to see that a much greater proportion are optimistic about the agencies they work for. Despite this being a major period of transition for the whole industry, most are doing all they can to make the best of a tough climate. As we move towards the anniversary of the Act, we would hope to see the dust settle as more agencies adapt their business models to cope with the new market realities.”
The full Goodlord State of the Industry report is available for download here.
Oh Goodlord Limited is an Appointed Representative of Goodlord Protect Limited for general insurance products and credit broking. Goodlord Protect Limited is directly authorised by the Financial Conduct Authority, registration number 836727. You can check this information on the Financial Services Register by visiting www.fca.org.uk/register or by telephoning 0800 111 6768 (Freephone) or 0300 500 8082 from the UK. The FCA is the independent watchdog that regulates financial services.