Prospective tenants struggle as reference failures rise amid Labour government concerns

Propertymark members report many prospective tenants are failing reference checks as many are worried about a Labour government.  

The latest figures from Propertymark’s Housing Insight Report reveal tenant demand has increased as rent prices fluctuate.

According to the survey, rent arrears increased slightly in May 2024 at just under 3%.

Demand for renting is high

Letting agents Devon Rose says they are seeing a shift in tenant inquiries.

Nick Spayne co-owner of Devon Rose said to Propertymark: “We are not receiving any enquiries from people on Housing Benefits, probably because the prices are too high.

“Although demand for renting is high, we are experiencing a high failure rate i.e. prospective tenants failing their referencing (CCJs, IVAs etc not being declared). This extends the time to occupy, upsets landlords and increases our workload.”

Rents continue to fluctuate by market and region. Propertymark members reported seeing rents remain static (47%) or increase (34%) in May 2024.

However, there was an increase in the number of members reporting a rent fall (18% in May 2024 vs 12% in April 2024)

Tenant demand remains strong

Nathan Emerson, chief executive officer of Propertymark, says tenant demand remains strong.

He said: “Tenant demand continues to increase. While stock levels have improved, there were around 9 applicants registered for each available property in May.

“Although most members report that rents continue to rise or have remained static, there is some good news for prospective tenants with an increase in the number of members reporting rents falling.”

None of the main parties seem interested in private landlords

Many Propertymark members are concerned about the Labour government’s potential policies impacting the rental market.

One letting agent in the East Midlands told Propertymark: “I think they will try and tax out the private landlords from the market making rents rise due to supply and demand. In the East Midlands, we have already seen a reduction in landlords due to mortgage rates and tax.

“We need to support the private sector, not attack it. The problem is the Conservatives also attacked our industry by making landlords pay for applications and credit checks. So, none of the main parties seem interested in private landlords.”

Supply and demand issue

Mr Emerson says the next government must tackle the supply and demand issue.

He said: “While both sectors remain resilient, there is much that the next government can do to support buyers, renters such as improving the home buying/renting process and professionalisation of the sector via the regulation of agents.

“More broadly there is a need for a review of property taxes to make changes which stimulate supply and demand.”