One in three landlords quit as renters struggle to find homes

A third of landlords have either sold or tried to sell their rental properties in the past year, a survey reveals.

That’s according to Goodlord’s latest State of the Lettings Industry report, which highlights a sector under strain.

Most of the issues are down to mounting financial and regulatory pressures affecting landlords, agents and renters alike, the firm says.

Landlords are disillusioned

The firm’s chief executive, William Reeve, said: “This year’s report reveals a market under intense and mounting pressure.

“Landlords are deeply disillusioned, with the Renters’ Rights Bill hastening their decision to exit the market.

“And agents are facing tough headwinds and escalating pressure on their bottom line, making finding new revenue streams and routes to efficiency has become an absolute imperative.”

He added: “One of the most worrying areas is tenants.

“Already struggling with rental costs and a shortage of properties, we believe that the Renters’ Rights Bill could unwittingly ramp up the pressures they’re facing.

“From blocking tenants from paying in advance, incentivising landlords to overprice properties, and driving more to sell-up, a bill designed to protect tenants could inadvertently be about to pull the rug out from under them.

“Renters’ Rights could very quickly become renters wronged.”

35% have sold or tried to

The Goodlord study shows that 35% of landlords have either sold (19%) or attempted to sell (16%) in the last 12 months.

While almost half (44%) sold a single property, 14% disposed of five or more homes.

Among those cutting their portfolios, four in five blamed the Renters’ Rights Bill, particularly the abolition of Section 21 notices, which 80% said would negatively affect the private rented sector.

Tenants struggle to find homes

However, the loss of rental properties is intensifying competition among tenants.

Half of renters said they struggled to secure a home this year, while two-thirds of agents reported rising demand and nearly a third said available stock had dropped.

In a bid to stand out, 40% of renters paid more than one month’s rent upfront – a practice that will be banned once the new legislation takes effect.

With more than 40% of renters expecting to remain tenants for at least five years, pressures on affordability and supply are unlikely to ease soon.

Rents could go higher

Goodlord’s analysis also warns that the new rules could drive rents even higher.

The planned ban on bidding above asking rent could trigger ‘gazundering’, where landlords set inflated initial rents to allow room for negotiation.

One in five landlords already plan to price higher to offset this risk.

Currently, 40% of landlords haven’t increased rents in the past year, but restrictions allowing rent rises only once annually may prompt more to raise rents routinely to avoid missing their chance.

Meanwhile, 22% of tenants said they would appeal any rent rise, which could flood the tribunal system and cause payment delays.

Periodic tenancies pose a challenge

Goodlord’s survey of more than 2,750 landlords, letting agents and tenants across the UK also found half of tenants (42%) spend at least 40% of their income on rent.

For those earning £20,000 or less, the figure rises to 73%.

The move to periodic tenancies poses a serious challenge for agents, who earn around 27% of revenue from renewals – rising to 37% in London.

Once fixed-term agreements end, agencies may face major shortfalls unless they adapt quickly.

While only 13% of landlords feel positive about the market, optimism among letting agents has grown slightly.

Around one in five agents said they are ‘somewhat optimistic’, and 7% ‘very optimistic’ about the future, marking a modest rise in sentiment after five years of decline.