In 2023, 77% of letting agents saw increased demand for tenants looking for homes, and 58% saw an growing scarcity of available properties, according to findings from Goodlord.
The ‘State of the Lettings Industry Report’ for 2023 sought the views of more than 2,000 people – including 1,168 private tenants and 861 property professionals.
Availability of private rented properties remained a challenge in the sector, at a time when demand for properties was rising.
Respondents gave numerous reasons for the lack of supply, including landlords leaving the sector, the pressure of increasing regulation from the Renters (Reform) Bill, and the pressure to upgrade properties to a higher energy efficiency rating.
More than 54% of landlords were pessimistic about the incoming Renters (Reform) Bill.
Letting agent sentiments were more mixed, with 29% believing the changes to be positive, and a further 43% feeling ‘somewhat’ or ‘very’ pessimistic.
Energy efficiency remained a contentious issue, with 78% of letting agents saying changing Energy Performance Certificate (EPC) requirements would have a negative impact on the private rented sector.
Only 28% of landlords said all their properties met the requirements, and letting agents estimated only 29% of their landlords were currently meeting regulations.
While 76% of tenants who moved between July 2022 and July 2023 found it difficult to find a rental property, more than three-quarters (73%) said that finding a new rental property was “one of the most stressful things they have ever done.”
Gregory Tsuman, lettings director at Martyn Gerrard, said: “Despite rocketing rents and rising demand, we are continuing to see landlords exit the private rented sector.
“Removal of full mortgage interest relief together with 14 consecutive base rate rises is forcing landlords to sell, creating creating a perfect storm for tenants.
“Unless section 24 of the Finance Act is reversed immediately and incentives are introduced for supply to return, it may prove too late to avert a significant rise in homelessness across the country.
“What this means: higher mortgage rates are putting pressure on landlords across the country, especially in London and the South West and South East.”
Ben Grech, CEO at Reposit, added: “The Government needs to ask itself ‘how can we make this market better for landlords, so they feel encouraged to participate and see the benefits from investing and providing accommodation?’
“Increased supply will actually create a more competitive market for landlords, pushing landlords to be better to win the tenants that they want.
“That’s a more sustainable way to create the change that we’re looking for in the industry.”
