6 expert predictions for the lettings industry in 2022: From landlord stock to legislation
Experts in the lettings industry share their predictions for what 2022 will bring, from tenant demand and landlord housing stock to the impact of legislative updates.
Goodlord agents and partners share their expert views on what the lettings sector could see in the coming 12 months. Ranging from increased efficiency in agencies to the Renters' Reform Bill, there are some solid predictions and advice for agents. The one thing that everyone's in agreement on? Stock will stay low, while demand will stay strong.
Sean Hooker, Head of Redress at the Property Redress Scheme
"There is no indication that the lettings market will go down significantly in any shape or form. In fact, demand will probably go up and I think it will be a good year for landlords and letting agents. Saying that, we have the usual pressures on the market. More churn will be a safe bet. A lot of people will start new businesses and some will fail because it's still a very competitive market out there, and I think build-to-rent will continue to grow.
"There is a further shift towards innovation and use of technology as well. It's an innovative market, there's a lot of new solutions and technologies coming through that will help agencies. And there is no room for complacency. The hardworking agent will prosper. The lazy one will not. This is the message out there, that there will be a separating of the wheat from the chaff, in a very competitive market.
"The demand is high from tenants, but landlords are harder to find, and you're going to have to fight for every customer. And that should mean improvement of service and value for money for the consumer. But that comes at a pressure on the agents to adapt and to innovate and to provide that service."
Greg Tsuman, Lettings Director at Martyn Gerrard
"I don't see rents dropping anytime soon. I do see some significant increases over the next 12 months, especially with the lack of stock in the market. Landlords should be speaking to their local lettings experts, and using 2022 to put in place a long-term strategy on how to make sure their properties' are a good long term investment. They can be doing their part to continue providing that much needed housing - because this void of supply is not going to be filled overnight.
"2022 is also the time to double down on looking at your landlord's energy efficiency ratings. You can make some changes now that will be much cheaper than waiting until the 2025 deadline, when landlords will likely need to have a minimum energy efficiency rating of C in order to let a property. Look at all the other compliance bits and pieces that are on the horizon, and check if there's any remedial work that needs to be done in advance. It's all about pre-empting compliance changes, and there are some big ones coming up.
"Over the last century, property prices have continued their upward trend. There have been some peaks and troughs, but letting a property offers a regular income, which can be protected through rent protection like Goodlord's, so landlords shouldn't be put off."
Robert Bolwell, Senior Partner at Dutton Gregory
"I think stock levels are likely to decline. There are parts of the country where they'll increase but I think they'll decline for a whole number of reasons.
"Number one, we didn't get a hit for Capital Gains Tax (CGT) in the budget that was predicted. I think at some stage in the budget in the next 12 months, we're going to hit CGT. And I think landlords know that. So if you were thinking of maybe selling up your property because you need the cash, would you do it before or after the next budget? So if you do it before, that's going to hit stock level.
"Number two, the press will be full of the Section 21 abolition. And even though landlords may not understand what it means for them, there will be a knee jerk reaction. "If I don't sell my property now, I won't get it back". So I think those two things will hit stock levels.
"Stock levels are being squeezed, but what's going to happen to rent? The ultimate nightmare of course, is if stock levels do decline because of CGT, because of section 21, because people are still buying properties from social landlords, if rents do start climbing significantly, and we've had a call for this in London, might we not have a government levelling up but wants to bring in some sort of rent cap, or at least a cap on rent increases?
"Now, if you are in London, you're the mayor there who wants to do that, he hasn't got the power to do it, but in the past two years, he's made various noises about trying to get that power from central government, they haven't given it to him yet, but that to my mind is the worry."
James Conway, Lettings Director at David Conway
"People thought that at the end of the stamp duty holiday that sales would plummet but the market's stayed continuously strong. First time buyers and renters as well had the chance to save up money staying at home during lockdown. Now, they can put this towards a mortgage or a deposit on a better rental property, and are looking to move - and I can't see that demand ending anytime soon. However, because there's a lack of properties available, I can see that prices will increase three to five percent."
Tom Mundy, COO and Co-Founder at Goodlord
"Goodlord's Rental Index had a record breaking year in 2021, with rents starting low and then surging back to 2019 levels as restrictions were lifted. With demand that high, voids were almost non-existent in certain parts of England too. That wave has carried us to the end of the year - and we don't see any sign of it abating in 2022, barring the seasonal peaks and troughs in lettings.
"Now that this demand is established as a long-term trend, I predict that agents that haven't already started to invest in time-saving processes will pivot out of necessity in 2022, to make sure that they don't slip behind in the race to support landlords and tenants in this new landscape.
"On the compliance side, the Renters' Reform Bill, when it's introduced, will add to the already heightened legislation in the industry, and more landlords will see the benefit of agents to help them navigate the deluge. We'll likely see a greater shift towards agents getting qualified to beat out the competition and demonstrate to landlords that they are the right agency to help keep them compliant."
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