Landlords more pessimistic than agents about upcoming legislation

Landlords are far more worried about dealing with upcoming legislation than agents, with just 22% saying they are “very confident” in coping with changes like the scrapping of Section 21 and periodic tenancies, Goodlord and Vouch’s State of the Lettings Industry survey has found.

This compares to 75% of agents who are “very” or “somewhat” confident that their businesses are set up to cope with future changes.

The government’s long-awaited publication of its rental reform White Paper in June caused a stir, with over half (56%) of landlords saying they are “very concerned” about the impact of the bill on the private rented sector.

It seems a number of landlords are considering their positions in the sector as a result, as nearly two thirds (63%) confirm they have considered leaving.

Indeed, 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 depart.

Tom Mundy, chief operating officer at Goodlord, said: “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.”

Two in five (40%) agents expect the introduction of a single system of periodic tenancies to negatively impact the private rented sector.

And the same proportion (40%) expect the new rules on allowing ‘pets in lets’ to have a negative impact on the sector.

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”.

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 two thirds (67%) said they expected even more of their landlords to leave in the coming year.

Comments 2

  1. Of course landlords are more anxious than agents. If a tenant goes into arrears the agent loses 10% commission but the landlord stands to lose hundreds a month. If a tenant is sitting there not paying rent the agent won’t go through the extended agony and cost of getting them out. Agents won’t be lying awake at night worrying about paying their buy-to-let mortgage or bills and worrying if the tenant is doing thousands of pounds of damage to their property. Money that they will very likely never get back. The landlords are the risk takers in the whole process and are running scared.
    The proposed reforms that will make it much more difficult to evict problem tenants do have landlords worried. Of course the vast percentage of tenants are absolutely fine, but for some landlords just one bad tenant could ruin them. Times are going to get hard, even previously good tenants might have to choose between eating, heating and paying the rent, most likely in that order.

  2. Agents will merely loose a bit of commission, if that, as most will just increase their fees. Landlords are the ones who put their money where there mouth is, the ones who risk investment and their opinions are of much more importance. Without investors there will be no PRS but the drongoes can’t quite see that. After all if they leave the market tenants will lose accommodation, agents will lose commission but will probably make it up with sales fees. Only politicians and so called housing charities can be so stupid to not realise landlords are fleeing the market yet these so called housing charities and silly tory MP’s like Natalie Elphicke (Dover) continue to drive away any remaining confidence in the BTL market by pushing for a 2 year rent freeze. Of course these vote purchasing MP’s risk nothing other than Landlords investments and of course tenants homes all for a bit of ill conceived political nonsense; of course in my humble opinion.

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