Over the past 12 months, 78% of letting agents saw increased demand for tenants looking for homes, according to findings from Goodlord and Vouch’s sixth annual State of the Lettings Industry report.
The report brought together the views of more than 2,000 letting agents, landlords and tenants from across England, Wales, and Scotland, who were surveyed on more than 100 topics.
It revealed that 58% of agents reported an increase in the scarcity of available properties over the past year.
According to the respondents, this imbalance was caused by several factors, including landlords selling up or reducing their portfolio, there being not enough new landlords, and more tenants remaining in rented accommodation as opposed to buying their own homes.
The majority (76%) of tenants who moved between July 2022 and July 2023 said they found it difficult to find a rental property, and 13% paid more rent per month than the originally advertised rate.
William Reeve, CEO at Goodlord, said: “This is our biggest report to date, both in terms of respondent size and the scope of topics covered.
“We’ve all felt the pressures facing the rental market over the last 12 months, but today’s report offers tangible evidence around what’s actually happening on the ground.
“We can see which forces are giving landlords pause for thought, where anxieties for tenants are coalescing, and how agents are preparing for change.
“The private rental sector is a vital part of our economy; we hope this report provides valuable insight to all of its stakeholders and encourages decision makers to take the steps which will boost confidence in the market, particularly for landlords.”
Over the last 12 months, 95% of letting agents saw at least one of their landlords sell at least one of their properties; nearly a quarter saw up to 20% of their landlords selling at least one of their properties.
The majority (80%) of letting agents expected more landlords to leave the sector in the next 12 months, and 36% said it would be a “significant amount”.
According to landlords themselves, 30% had put at least one property up for sale, and a further 17% were considering doing so in the next 12 months.
Only 53% of landlords said they did not sell or attempt to sell a property this year.
When asked for the reasons why landlords may be selling their properties, 82% of agents and 70% of landlords cited an economic or financial reason, including the impact of higher mortgage rates, changes in taxation, the impact of higher other costs, and better investment opportunities outside the sector.
More than half (55%) of agents cited the upcoming Renters (Reform) Bill as a factor driving landlords out, 15% higher than when agents were polled on this question last year.
56% of landlords also cited the Renters (Reform) Bill as a reason for leaving the sector.
Landlords were pessimistic about the introduction of the new Bill – with 25% feeling “very” pessimistic and 29% feeling “somewhat pessimistic” (54% in total).
Only 14% of landlords felt at all optimistic.
Letting agents were more mixed, with 43% either somewhat or very pessimistic about the Bill, but 29% feeling optimistic about the changes.
Tom Goodman, managing director at Vouch, added: “Although it’s understandable to see rising concern from agents and landlords about the changes to come, it’s more important than ever to see the positive in this shifting landscape.
“Upcoming legislation is a real opportunity for letting agents to demonstrate their value to landlords and tenants, meaning clued-up letting agents will continue to thrive.”
