New Report Sheds Light On What’s Really Happening in the Letting Industry

Goodlord and Vouch have just released their sixth State of the Lettings Industry report, taking their usual deep dive into the state of UK lettings and providing a comprehensive assessment of the current state-of-play. Featuring insights from more than 2000 people, including 1161 private tenants and 861 letting agents, landlords and industry professionals, it’s safe to say this is a definitive insight from two of the leading lettings technology platforms. Here, we’ll summarise the report, identifying its key points and what they mean for the sector going forwards…

More Tenants, Less Properties

A major challenge this year has undoubtedly been the discrepancy between supply and demand, with more tenants looking to rent than properties available. Those respondents involved in the report gave a range of reasons for the ongoing lack of supply, citing the number of landlords leaving the sector, the increase in regulation due to the Renters Reform Bill, and the expectation to upgrade properties to a higher efficiency rating.?

The report states that 47% of landlords have either sold, or are attempting to sell, at least one of their properties this year, resulting in a lack of available stock overall. The increase in mortgage rates is also a factor, whilst the upcoming changes to the EPC (Energy Performance Certificate) continue to have an impact.?

Changes to Legislation a Cause For Concern

The Renters Reform Bill was officially introduced by the government in May 2023, and is now required to go through a lengthy parliamentary process before being officially passed into law. The repeal of the section 21 ‘no fault’ eviction has been a particular misgiving for landlords and letting agents based in England, as have the introduction of periodic tenancies as standard. Other proposals - such as the property portal - received less pushback, although some remain critical of this measure.?

However, around 50% of those who took part in the report believe the strengthening of section 8 would have neither a positive nor a negative effect on the sector. Conversely, almost 50% of landlords and letting agents thought the impact of rolling contracts would ultimately prove to be a negative.?

General Unease Surrounding the Private Rented Sector?

When asked to consider the outlook for the private rented sector, both tenants and industry professionals predominantly took a negative view regarding the direction of travel. When asked the question, ‘How positive do you feel about the future of the rented sector?’ landlords were the most discouraged, whilst industry suppliers were considerably more optimistic. Meanwhile, letting agents seem to share the same lack of confidence expressed by landlords about how things are progressing.

In a trend ongoing over the course of the last few years, demand from tenants still far outweighs the amount of homes readily available. With landlords continuing to take their properties off the market, this disparity is clearly a long way from resolving itself, meaning the challenges faced by the lettings sector are, it seems, set to continue for at least the time being.??