Letting agents predict rise in arrears and drop in landlord numbers

Letting agents predict rise in arrears and drop in landlord numbers

10:15 AM, 16th January 2023, About 2 years ago 1

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Most letting agents say they expect to see more landlords leave the market in 2023 – against a backdrop of rising arrears and falling house prices.

The findings come from a survey of more than 160 industry professionals as part of Goodlord’s recent ‘2023 predictions‘.

The survey also reveals that more than half of all agents, 58%, believe that landlord numbers will fall as rising interest rates and new regulation encourage more of them to sell-up.

However, just 31% of agents are more optimistic and believe landlord numbers will stay the same, with 11% believing numbers will increase over the next 12 months.

‘Combine to push landlords out of the market’

Goodlord’s chief executive, William Reeve, believes the pace of regulatory change, coupled with the new economic landscape, will combine to push landlords out of the market.

He said: “A lot of the new policies have been deterring or restricting supply – encouraging landlords to look elsewhere for how to deploy their capital.

“This obviously has an impact on stock.”

Cost of living crisis will also be felt with a rise in arrears

The agents also believe that inflationary pressures and the cost-of-living crisis will also be felt with a rise in arrears – 66% are expecting to see rent arrears to increase by up to 5% during 2023.

Greg Tsuman, the lettings director at Martyn Gerrard, said: “I think more and more landlords are concerned about the cost-of-living crisis and how that will affect the tenant’s ability to pay their rent.”

However, Peter Knight, the founder of the Property Academy, doesn’t think that ‘rent freezes’ are the answer.

He says that the likely outcome will be a ‘reduction in the number of properties that will be available’ which will exacerbate the sector’s supply and demand issues.

The survey shows that 32% of agents expect arrears levels to remain the same, with only 2% predicting that numbers will go down.

Agents said they think prices will decrease by 5%

When asked about the potential for house prices this year, 67% of the agents said they think prices will decrease by 5% or more – and pricing decline is already beginning to show.

Only 15% of agents expect an increase of up to 5% or more in prices, and 17% expect prices to remain the same.

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Rob Crawford

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12:51 PM, 17th January 2023, About 2 years ago

I think the main reason why Landlords are exiting the PRS is due to the threat of a Labour Government being voted in and their tenant centric policy. Especialy the introduction of unfair rent controls. However, landlords are also very uncomfortable in a climate of threatened regulation and the unknown! How to meet not fit for purpose EPC legislation and also meet a conflicting Carbon Emissions policy and also what if anything will replace the accelerated repossession section 21 process being just two examples!

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