Following the release of the State of the Lettings Industry 2025 report, a panel of four experts discussed the key takeaways at the Haymarket Hotel on October 9.
Goodlord’s 2025 State of the Lettings Industry (SOTLI) report comes at a crucial time for the Private Rented Sector (PRS). On October 9, Goodlord hosted an exclusive breakfast event at the Haymarket Hotel to discuss the key findings of the report and what they could mean for the industry.
Our CEO, William Reeve, moderated the discussion and was joined by:
- Oli Sherlock - Managing Director of Insurance, Goodlord
- Lucy Jones - Chief Operating Officer, Lomond
- Allison Thompson - National Lettings Managing Director, LRG
- David Smith - Partner, Spector Constant & Williams
The panel tackled a wide range of findings from the report, including AI use in the industry, the loss of renewal revenue following the shift to periodic tenancies, the ban on rent in advance, and more.
Key takeaways: What does the State of the Lettings Industry tell us about the Renters’ Rights Bill?
Here are the key points the panel focused on:
- 1 - Agencies must add value to replace lost renewal revenue when ASTs are abolished
- 2 - Difficult times ahead for first-tier tribunals on rent increases
- 3 - Agent guidance on rent pricing will be critical after ban on overbidding
- 4 - Vulnerable tenant groups will be hit hardest by banning rent in advance in England
- 5 - Communication will be key for preparing agencies and landlords for the Renters' Rights Bill
- 6 - While AI will be a useful tool, agencies should err on its use in compliance
Click the links above to be taken to the relevant section, or keep scrolling.
1 - Agencies must add value to replace lost renewal revenue when ASTs are abolished
We’re looking at the opportunity to make sure we add value to that process of the rent increase. The process still has to happen, a legal document, a legal notice still has to be served, we have to meet timelines, we have to have good quality conversations, we have to make sure that we can do that to prevent first-tier tribunals, so we have to be able to demonstrate value and levy a charge for that.” - Allison Thompson
The panel’s first topic was the abolishment of Section 21. The State of the Lettings Industry report found that on average, 27% of agencies' revenue comes from renewals. In London, this percentage rises to 37%.
When asked how agencies are preparing for this, Lucy Jones, Chief Operating Officer at Lomond, said:
“When we look at the revenue we believe we will lose, it's over ten million, so really significant. That said, I think London is probably a little bit more resilient in that most neighbourhoods will probably apply a continuation of the letting fee to mitigate most of that renewal loss…I'm sure we'll all [...] dip into serving our Section 8 notices, whereas previously we may have referred them to our legal colleagues.”
Allison Thompson, National Lettings Managing Director at LRG, added:
“Everybody's business model and fee structure will vary, but what renewals do do is trigger rent increases broadly and for us, we’re looking at the opportunity to make sure we add value to that process of the rent increase. The process still has to happen, a legal document, a legal notice still has to be served, we have to meet timelines, we have to have good quality conversations, we have to make sure that we can do that to prevent first-tier tribunals, so we have to be able to demonstrate value and levy a charge for that.”
2 - Difficult times ahead for first-tier tribunals on rent increases
"...if I tell you that there are 80,000 criminal cases pending trial and last week the Crown Court offered a trial date to somebody for the end of 2029, you might realise that your version of overwhelm and the government's version of overwhelm may not be in the same place.” - David Smith
Goodlord's CEO, William Reeve, then directed the conversation toward the issue of rent increases under the Renters’ Rights Bill.
The legislation dictates that landlords will only be able to raise the rent once a year using a Section 13 notice, which tenants can dispute. SOTLI 2025 data tells us that 22% of tenants will appeal rent increases regardless of whether they think the increase is fair or not.
William warned:
“The first-tier tribunal, which handles only a few thousand cases a year, looks set to be overwhelmed by the provisions in the bill, which give tenants a kind of challenger's charter, as some people have put it,” and asked David Smith, Partner at Spector Constant & Williams, “Does the tribunal know what's coming?”
David Smith replied:
“It knows. There may not be much it can do about it. Ultimately, the first-tier tribunal is a judicial entity, and it's reliant on funding from the state. The government is not necessarily funding justice that much. The Ministry of Justice is a department that is not ring-fenced. It's subject to cuts, and any money that's put in is put into crime first. The government suggested it might change the rules on backdating if the tribunal's overwhelmed, but if I tell you that there are 80,000 criminal cases pending trial and last week the Crown Court offered a trial date to somebody for the end of 2029, you might realise that your version of overwhelm and the government's version of overwhelm may not be in the same place.”
William then asked the panel if this legislation would inadvertently cause the quarter of landlords who don’t increase rents on sitting tenants to change the way they operate and build annual rental increases into their processes. Oli Sherlock, Goodlord’s Managing Director of Insurance, answered him:
“I think so [...] If you give people a framework to work within, most people will work within that framework. Essentially, what we're now saying is that every single year, you have the opportunity to increase rents, and therefore you should. We can't forget that landlords have been under immense pressure themselves, and actually, their costs have risen in the same way that all of ours have, and all the tenants have.
“I think the administrative process there is difficult, and I think the emotional toll is difficult for agencies, because tenants will feel very passionate about this and understand they have free rein to appeal. Landlords will feel very passionate about this and understand that tenants have free rein to appeal. So I think this is going to be a stress point.”
Before moving on, David Smith added a point on how he thinks rents might rise under the Bill:
“People are kind of ignoring the other way that rents are likely to rise in all of this, because in London, particularly, what happens all the time in shared property? One person wants to leave, and we do a tenancy change. Now, the reality is, under the Renters' Price Bill, one person can give notice to end that tenancy, so in practice what [agents] are probably going to do is say, ‘We don't do tenancy changes, we're not going to do it, sorry, you'll just have to terminate the tenancy’ at which point, well, we contract with a new group of tenants on a new tenancy agreement at a new rent, without going through the Section 13 process, and in fact, I suspect that will become a big engine of rent rise.”
3 - Landlords say they’ll advertise higher rents to leave room for negotiation
...[The] problem is a tenant might come along and offer to pay you a really high amount, but with no intention of ever paying you that really high amount, because what they’ll do is immediately serve a notice on you, go straight to the tribunal and say, well, this is a market rent, and have it reduced back down.” - David Smith
William then introduced the next topic:
“We asked landlords specifically about this ban on overbidding, so people won't be allowed to agree that rent is higher than an advertised rent, and we asked how they were likely to handle that, and what we saw was about half the landlords said that they would just research the market, but 20% of them were obviously on to the ... game theory of this, and were saying they’re going to leave room for negotiation by advertising a higher price.”
After some questions from the audience concerning the minutiae of the incoming law, David Smith laid out how landlords and agents might contend with the legislation:
“One solution to the overbidding rules is to advertise your property for a million pounds a month. But there are two problems with that. One, your portals all have banding on them, so if you put it above a band, lots of tenants will automatically filter it out because they’ll set a banding. But the second problem is a tenant might come along and offer to pay you a really high amount, but with no intention of ever paying you that really high amount, because what they’ll do is immediately serve a notice on you, go straight to the tribunal and say, well, this is a market rent, and have it reduced back down.”
He continued:
“I think people are inevitably going to overbid, but I think there’s going to be quite an interesting science about this, about where you set your price. And this is an area where I think agents have real value to add. Who knows a local market better than a local agent? And I think agents have a lot of value to add to that loss inside the rent increase and setting process, because they should in theory be able to provide really good local valuation, and getting that pricing right is going to be critical to getting the best tenant at the best price, but without allowing overbidding, and getting a good rent increase based on good accounts.”
4 - Vulnerable tenant groups will be hit hardest by banning rent in advance in England
This really is the unintended consequence of the bill, because we’ve all been there with tenants who just don’t quite meet the referencing criteria but can, through whatever support or means they’re able, pay rent in advance, suddenly won’t be able to. That’s going to be very problematic indeed. - Lucy Jones
In the report, 2 in 5 tenants reported paying more than one month's rent in advance to secure a property. Under the Renters’ Rights Bill, this will no longer be allowed. William asked the panel what this might mean for tenants. Lucy Jones answered with concerns for overseas tenants:
“We know the rationale is that it’s there to prevent people from being priced out of the market by competitive advantage. But when I look across our businesses, which primarily deal with overseas landlords marketing properties, typically tenanted by overseas tenants who come to the UK, who probably don’t have a UK bank account at first. Whereas they would have been sound paying their rent in advance in a property type that is quite ring-fenced for them…Suddenly, that market doesn’t work.”
And then for tenants who might have difficulty securing a property:
“Of course, there’s the affordability piece, and this really is the unintended consequence of the bill, because we’ve all been there with tenants who just don’t quite meet the referencing criteria but can, through whatever support or means they’re able, pay rent in advance, suddenly won’t be able to. That’s going to be very problematic indeed.”
And finally:
“I feel the rules will get quite lax on this one, or what practice will get quite lax, in terms of agents are going to have to take that first month’s rent the day, two days before the tenancy starts. I don’t think any agent will allow themselves to be in a position where they risk a tenant moving into the property because they’re entitled to, without having paid their first month’s rent.”
5 - Communication will be key to preparing agencies and landlords for the Renters’ Rights Bill
“The appetite for information is non-negotiable. When we send a mailer to landlords and tenants in our customer base, we would typically expect to see a 20% open rate. We're seeing open rates of sort of 65, 70, 75%. We’re doing landlord events to talk about it [the Bill] and they're selling out." - Lucy Jones
Preparedness for the Renters’ Rights Bill has been an ongoing question within the PRS. The State of the Lettings Industry reported that 47% of larger agencies say they’re “very prepared” for the Bill. William asked the two agencies on the panel, Lomond and LRG, how they were feeling.
Lucy Jones laid out how Lomond had been preparing:
“I would say that at Lomond we do feel well prepared. We’ve had a working group in place for over a year now, and that’s how long it’s taken us to get to a point where we are comfortably prepared. We have 3,000 staff, and 3,000 staff are now trained, including all of our sales colleagues.”
She continued:
“I think the human element is the most important. We don’t have a product to sell, we're a service provider…So we go through training with our teams [so that they] can provide the level of service that we really want our customers to experience. When a landlord comes to the branch, speaks to a negotiator, and wants advice, they are really getting good advice. That’s as much of the challenge as mitigating fee losses and having the paperwork ready and having the systems completed.”
Allison Thompson spoke to LRG’s preparedness:
“We’re as prepared as we can be without the white smoke coming out of the chimney, but we’ve decided not to wait for the white smoke. We’ve got to make changes, and we’ve got to put plans in place, so we’ve done exactly as Lucy’s alluded to. We’ve looked at our PE structures, our processes, our terms of business, every single piece of paper, and every legal document.
“Most importantly, what we’ve done is that we’ve started communicating with our landlords and our tenants. We’ve been doing webinars, we've been in regular communication, we've been inviting landlords to come and speak to us in branch surgeries, and we've been training our staff. I think Lucy’s absolutely right, the value that an agent can have now will be in the advice they can offer.
Lucy Jones added a final point on what Lomond is seeing from their landlords:
“The appetite for information is non-negotiable. When we send a mailer to landlords and tenants in our customer base, we would typically expect to see a 20% open rate. We're seeing open rates of sort of 65, 70, 75%. We’re doing landlord events to talk about it [the Bill] and they're selling out. We feel like we’ve got to use Ticketmaster to plan a national tour to talk to our landlords. They want to hear from us, and they want to be having those conversations with us.”
6 - While AI will be a useful tool, agencies should err on its use in compliance
The use of AI in the PRS has become a hot-button topic since the 2024 report was released. The 2025 report revealed that nearly half (47%) of agencies have experimented with AI, and 1 in 14 agencies say that it has transformed their operations.
Panellists were generally friendly towards AI, but emphasised the need for education on the subject for tenants, as the report found that 59% of respondents wouldn’t be comfortable interacting with an AI agent bot. Lucy Jones explained:
“I noticed in your survey, there was a sort of reluctance from customers to say ‘I don't want to use AI’, but they probably don't realise to a degree that they already do with chatbots. When our customers use Fixflo, there is AI integrated, albeit not in the realms we are now looking at. Our view is that we want AI to do the tasks that have no meaningful impact on our customers, so we want AI to do the things that free up our teams to have more time to have more meaningful conversations with all of our customers. Those are the areas we are actively looking at.”
Allison Thompson agreed:
“I think as well not to be confused between AI and automation. I think you can gain a huge amount of efficiency through automation. Then AI, in my opinion, can be utilised to enhance customer experience and potentially improve commercial margins, as Lucy's already alluded to. One big thing I think potentially coming out of track that you could utilise AI for, if it's very intelligently trained, is compliance.”
David Smith did add a note of caution on using AI for legal matters:
“The problem with this, though, is that most AI is trained on the internet, and when it comes to the law and especially the internet, it really sucks. The problem area is training the models for specific purposes. I mean I’ll tell you what I've seen a lot of, I think you've all seen it too, ChatGPT-written claim letters by tenants, and you can tell [when it’s written by AI].”
Conclusion
What emerged from the panel discussion is that, while change brings uncertainty, it also brings opportunity. Agencies that invest in training, communication, and technology grow and thrive under the Bill. The panel also emphasised the value of local expertise, sound legal understanding, and human connection.
The State of the Lettings Industry report is packed with crucial information that will help agents and landlords like you make informed decisions about their businesses. Whether they’re pondering the implications of an AI-led PRS or how far their tenants would be willing to move to secure housing, you need to harness all the information you can.
We’d like to thank our panellists for a lively and informative discussion. If you’d like your own copy of the State of the Lettings Industry 2025 report, you can find it at the link below.
