This year’s State of the UK Rental Market Report paints a picture of optimism for the sector, tempered by some significant concerns.
What are the report headlines?
With 550 agents and 1,700 tenants participating in the survey, this annual report provides an extensive view of the state of the lettings market. Assessing key aspects of the rental sector, we can get a good feel for the pulse of the industry and, looking at some of the report headlines, note some trends emerging:
• Rent arrears: Over the past year, those reporting an increase in rent arrears has halved from 64% to 32%. This is a positive development, but it is still the case that 48% are reporting arrears have stayed at the same level over the past year. Despite this, 81% of tenants said the pandemic had not affected their ability to pay rent in the past year.
• Tenants remaining in the rental sector: Only 46% of tenants expected to own their property within five years. This means the majority are expecting to continue renting for a few years to come. The report highlights that only 16% had moved or considered moving because of Covid-19, and tenancies are looking stable.
• Landlords leaving the sector: 83% of lettings professionals report landlords leaving the sector, more than you would expect to see in a normal year. This means agents must ensure that they are allocating the necessary resources and taking the right approach to continue attracting new landlords, especially if they want to see growth in the market.
• Lack of rental stock: Letting agents of all sizes are reporting their businesses have struggled due to a lack of stock of the last year. 54% of smaller agents (up to 200 properties) reported this as an issue, whilst 70% of agents with 500-999 properties raised this as a concern.
While optimism among agents is down from the previous report, it remains relatively strong, with 67% saying they felt very or somewhat optimistic about the future of the lettings industry. However, with 32% of agents stating a lack of stock as their main concern, winning more landlords and finding new ways of generating revenue are among the top priorities in the coming year.
In addition, ongoing concerns around legislation and compliance will continue to shape the sector, especially with the Renters Reform Bill on the horizon.
Adapting to the changing circumstances of the past 18 months will have been a priority for all agents, landlords and tenants, but looking to the future, there is a need for agents to assess how they remain competitive by tackling the challenges ahead.
We have seen the industry embrace innovation and technology, with only 1% of survey respondents saying they do not use any form of technology in their business. The sector will need to continue evolving to attract, engage and retain all existing and potential stakeholders.
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If you want to discuss how our local support or national network at No Letting Go could become your inventory partner, streamline your cost and reduce your workload, then contact No Letting Go today.
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