0:04 AM, 4th October 2024, About 3 hours ago
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Landlords are increasingly exiting the private rented sector (PRS), and tenants are facing rising rents, a new report reveals.
The 7th annual Goodlord & Vouch State of the Lettings Industry Report paints a grim picture of the UK’s rental market.
Around 1,500 respondents took part, and it was found that many landlords are selling their rental properties or reducing their portfolios.
One in three landlords have sold at least one property this year and they point to factors including incoming legislation and new energy efficiency standards for leaving.
A further 17% of landlords say they are planning to sell over the next year.
That means almost half of all landlords have already sold off some PRS stock or are planning to do so.
That trend is reflected with 58% of letting agents reporting a fall in the number of available properties – 37% say the drop is ‘significant’.
For landlords quitting, the potential abolition of Section 21 ‘no-fault’ evictions was the primary reason for 56%.
Letting agents agree – 66% believe the new Renters’ Rights Bill will ultimately lead to fewer rental properties being available.
Almost a fifth of landlords whose properties don’t meet the minimum EPC threshold of C said they aren’t prepared to invest anything in upgrading their properties.
Rising mortgage rates, increased arrears and tax changes are also driving landlords to sell up.
Goodlord’s chief executive, William Reeve, said: “This year’s report doesn’t give us a lot to be cheerful about.
“The whole sector is under intense pressure and the light at the end of the tunnel remains fairly dim.
“Overall, the country needs more rental homes to alleviate the supply/demand imbalance – which in turn requires house building, streamlined regulations, and better landlord incentives.”
He adds: “While letting agents themselves will generally continue to be resilient – as they have so consistently demonstrated in recent years – neither landlords nor tenants have much to be optimistic about right now.”
The report highlights that tenants are facing increasing financial pressures as rents continue to soar.
Many are now spending more than 40% of their income on rent, putting them at risk of ‘rent poverty’.
The competition for rental properties is fierce but overbidding – which Labour says it will outlaw – is not widespread.
Letting agents are dealing with a surge in demand from tenants but are also facing challenges such as stress and mental health issues.
Despite the pressures, agents are remaining resilient and prioritising attracting new landlords and securing property stock.
Tom Goodman, the managing director of Vouch, said: “The stark takeaway of this report is how intertwined the fates of the PRS stakeholders are.
“Landlord pressure is felt directly by tenants and vice versa.
“Against the backdrop of these rising challenges, agents are handling a more complex workload but also navigating booming demand from tenants.”
He added: “We need to start considering the bigger, more interconnected picture when it comes to regulation and reform.
“We need the next chapter of the PRS to be one which benefits all. The focus must be creating a foundation on which everyone can thrive.”
