Letting agents predict 2023 will be tough for tenants

The private rented sector (PRS) will endure a tough 2023 with rising rents and more tenants falling into arrears, the UK Association of Letting Agents (UKALA) warns.

A survey of 1,100 members in England, Scotland and Wales is predicting that tenants will find the next 12 months increasingly difficult with 79% of agents predicting that rents will continue rising this year.

The figures show that 58% of agents believe rents will increase by up to 10% and 21% say they will rise by more than 10%.

None predict that rents will fall

Just 17% of letting agents are forecasting no change in rent prices – and virtually none of them is predicting that rents will fall.

There are also concerns over tenant arrears with nearly 68% of agents predicting that rent arrears will increase in 2023 – and 8.5% of agents say that the level of arrears will more than double.

The problem areas for landlords will mostly be in Greater London and the South East of England.

Agents are also predicting that arrears in the South West will be ‘significant’.

‘Increased tenant arrears due to affordability’

Tim Clark, the chairman of UKALA, says the results are concerning but not surprising and added: “The economic situation in the UK is, as we know, going to be difficult and this will clearly impact on rents, due to rising costs for landlords, and increased tenant arrears due to affordability.”

The issue of rental stock levels sees 89% of agents believe that landlords will reduce their portfolios in 2023 – 61% said ‘slightly’, and 28% said ‘significantly’ which would equate to selling more than 10% of their portfolio.

However, not one agent believes their landlords will increase their portfolios – and 11% forecast no change occurring.

‘Increasing burden on landlords’

Mr Clark said: “The increasing burden on landlords, which has been happening for quite some time, is now starting to have a real impact on the availability of rental stock in the private sector.

“Our survey results show this quite starkly.”

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