Thousands of industry stakeholders take part in largest ever State of the Lettings Industry Survey
This year’s report gathered the opinions of over 2,600 agents, landlords, and tenants. The poll is the most comprehensive analysis of market sentiment since the Government unveiled its White Paper on rental reform and comes at a time when the Private Rental Sector is facing a litany of changes and challenges.
Goodlord and Vouch have released the results from their fifth State of the Lettings Industry survey. This year’s report is the largest of its kind and gathered the opinions of over 2,600 agents, landlords, and tenants. The poll is the most comprehensive analysis of market sentiment since the Government unveiled its White Paper on rental reform and comes at a time when the Private Rental Sector is facing a litany of changes and challenges.
Legislation and the Renters’ Reform Bill
White Paper causing concern amongst agents and landlords
The Government’s long awaited publication of their rental reform White Paper in June gave the industry a much clearer picture on what legislation to expect over the coming months and years. And the immediate feedback from the sector was far from positive.
81% of agents expressed concern about the impact the Renters' Reform Bill could have on the private rented sector. One third (33%) of agents said they were "very concerned" and 48% of agents said they were "somewhat concerned".
Landlords felt even more strongly. With over half (56%) "very concerned" about the impact of the Bill on the private rented sector.
However, two-thirds of tenants (70%) agree that they would like to see “more legislation introduced around renting in the UK".
Section 21 remains contentious
Abolishing section 21 remains contentious, with 28% of agents and 53% of landlords expecting it to have a "major and negative impact" on the PRS. In contrast, 23% of tenants said they thought it would have a "major and positive impact".
Periodic tenancies and pets spark opposition
40% of agents expect the introduction of a single system of periodic tenancies to have a negative impact on the PRS. The same number, 40%, expect the new rules on allowing pets in lets to have a negative impact on the sector.
Agents confident about legislation but landlords pessimistic
The vast majority of agents, however, remain bullish about their ability to handle the upcoming changes. 75% of agents said they were "very” and “somewhat” confident that their businesses were set up to cope with future legislation changes.
In comparison, only 22% of landlords said they were "very confident" that they were set up to cope with future legislation changes - a worrying statistic at a time when stocks are low and more landlords than ever are leaving the sector.
Cost of living crisis and the economy
Rental arrears drop year on year, but predicted to rise
In brighter news, fewer agents have seen increases in rent arrears over the past year — only a quarter (24%) said they've seen increases in arrears across their portfolios. This compares to 32% of all agents this time last year.
However, of those agents who had seen arrears increase, almost half (47%) said that arrears in their portfolio had increased by more than 20%, indicating the intense financial pressures faced by certain households.
Landlords and agents concerned for tenant finances
This reflects a broader concern from agents around the impact the cost of living crisis is set to have on the market during the year ahead. 80% of agents say they are "very" (31%) or “somewhat” (50%) concerned about the impact of an economic recession on the private rented sector.
46% of landlords believe the cost of living crisis will have a major negative impact on tenants. And the same number of tenants agree; 46% are concerned the crisis could impact their ability to pay rent.
15% of tenants said they had already had to make other arrangements (such as a payment plan or borrowing from friends or family) so that they would not miss rent payments. And a fifth of tenants (22%) said they had already moved as a result of the cost of living crisis. A further 10% said they were considering moving for the same reason.
Lack of stock intensifies as landlord losses mount
In 2021, low stock was the leading cause of concern for agents. And it appears that the last twelve months have done little to ease the pressure.
Almost two-thirds (65%) of agents said they had struggled with a lack of stock in the past year. Shockingly, more than a quarter (28%) of agents had seen more than 10% of their landlords leave the sector in the past year. And 67% said they expected even more of their landlords to leave in the coming year.
Legislation pushing landlords away
63% of landlords said they had considered leaving the private rented sector. Almost three-quarters (72%) of landlords said that legislation and regulation changes would be one of the top three reasons that would cause them to leave.
Optimism declines, but pessimism still in the minority
There’s been a big drop in optimism amongst agents. Less than half of agents (42%) say they're either "very optimistic" or "somewhat optimistic" about the future of the lettings industry. This compares to 67% of respondents in 2021 and 80% in September 2020 (at which point the UK was emerging from all initial lockdown restrictions).
However, only a quarter of agents (26%) say they're pessimistic about the future of the lettings industry.
Letting agents are also feeling stressed out in the current climate, with 87% of respondents agreeing to some extent that "most days, I feel stressed in my job". 90% said that their workload had increased in 2022.
Tom Mundy, COO at Goodlord, comments:
“This report comes at a seismic time for the industry. After two and half years of almost unimaginable upheaval, the private rental sector is now facing another series of intense challenges. A raft of new legislation and a major economic crisis mean that the year ahead will be choppy. It’s clear from the data that tenants are concerned about their finances and landlords are also feeling uneasy. Despite this, the majority of agents remain optimistic about the future and confident in their ability to weather the forthcoming challenges. As ever, I’m full of admiration for our industry stakeholders and their ability to adapt and thrive even in unsettled times.”