The PRS survey 2023
The thoughts and opinions of landlords and agents in the private rented sector revealed
We gathered the thoughts and opinions of 2,700 landlords and agents in the private rented sector in our sentiment survey.
The private rental sector is constantly evolving, shaped by a range of factors from government legislation to the global economy, mortgage rates and trends in tenant demand. In the ultimate sentiment survey of 2023, we delve deep into the hearts and minds of those at the forefront of the sector. Our survey paints a vivid picture of the challenges, opportunities, and the future envisioned by landlords and agents alike.
An overwhelming 88.4% of those we asked were landlords, highlighting their crucial role in shaping the sector and offering valuable insights for agents. A smaller subset (6.3%) play dual roles as both landlords and agents and 5.2% identify themselves as agents alone.
Self-management reigns supreme amongst landlords, with 65% overseeing their property portfolios, an increase from 56.3% in 2022. However, 19.1% rely on a hybrid of self and agent management. Fully agent-managed and let-only agent-managed properties account for 13.9% and 7.9% respectively.
The dominance of self-management implies a preference for direct control. But while it’s good to see that 49% of landlords are ‘very confident’ in their current property management choices, there remains significant potential for agents to help self-managed, hybrid and let-only landlords navigate the rental landscape with a fully managed service as the sector increases in complexity.
When it comes to the sector's ‘fitness for purpose’, opinions are divided, with a slight majority of landlords (56.7%) considering it unfit for its intended purpose.
“Increasing regulation, poorer tax breaks and increased mortgage costs are making it less viable for private landlords.”
Agents are slightly more optimistic, with over half (52.2%), agreeing that it is fit for purpose. Agents are less exposed to some of the financial and legislative challenges faced by landlords, who are also ultimately liable and responsible, even if they’ve handed the reigns to a letting agent.
As an agent I see that many landlords are not in a position to pay for upgrades to properties due to the removal of Section 24 and not being able to claim mortgage costs as an expense, plus there have been increased buy to let mortgage costs.
In our 2022 survey, by contrast, a strong majority of agents (76%) and landlords (72%) felt the private rented sector was fit for purpose, citing regular income and protective regulations as key reasons.
Despite over half of landlord respondents feeling that the sector was not fit for purpose at the beginning of 2023, the vast majority (85.8%) said they felt that renting offered good value for money for their tenants, with many not having increased rents in line with inflation, particularly for longer tenured tenants.
I offer below market rents because I have long standing tenants who are good and look after the property. I have absorbed some of the mortgage interest increases.
I am not a business landlord. I am renting to provide a home to families. I have not increased the rent very much in the past 8 years.
This figure remained reasonably consistent at the end of the year, with just 14.2% of landlords saying that they had changed their mind when it came to the value for money of renting for tenants.
A large majority of agents (73.2%) also believed at the beginning of 2023 that renting offered good value for money for tenants. However, 23.2% of agents have since changed their opinion, which could reflect market shifts such as the reduction in supply, which has been causing tenants to outbid each other to secure a property.
Rents have gone through the roof, pushed up by economic and legislative factors, and are now too high for most tenants, driven by lack of supply.
Although a resounding 85.8% of landlords said that they believed that renting offered good value for money at the beginning of 2023, this belief was tempered by the financial returns, which only satisfied 51.7% of respondents. This discrepancy raises questions about the sustainability and economic pressures of the rental market.
Agents were fairly split in their views on the financial return from running their agency in 2023, with 63.1% expressing satisfaction. This could reflect resilience in the face of market challenges or agents’ successful adaptation to the changing landscape.
There is significant uncertainty around whether agents saw a rise in the number of competitors going into liquidation, with 45.7% saying they ‘don’t know', which could stem from a lack of transparency in the market or agents not being privy to the financial health of their competitors.
When landlords were asked to rank the core aspects of their role, managing rent payments was one of the less challenging tasks, with 82.6% of landlords responding that they had an ‘average’ or ‘above average’ experience in this area, although a minority still had notable concerns.
Over half of respondents indicated an above average experience in finding and referencing tenants, but 11.4% reported a ‘very negative’ experience.
Landlords’ experience of communicating with tenants during the tenancy was varied, with over half (52.7%) reporting above average, positive experiences.
A considerable challenge for landlords is the end of tenancy process – 74.8% indicated that they had a negative or very negative experience in this aspect of managing the tenancy.
However, complying with legislation, for example gas and electrical certificates, was the area that landlords said they struggled with the most, with the highest number of landlords (38.2%) indicating that they had ‘very negative’ experiences complying with legislation.
Despite reporting some negative experiences, over half of landlord respondents said they
Legislation
Property maintenance
Rent payments
were ‘very confident’ about compliance with legislative requirements. However, a staggering 61.9% said they felt ‘not supported at all’ by the Government - an increase from 43% in 2022.
Over three quarters (78.6%) reported that legislation ‘hinders’ landlords, compared with 48% in 2022, signalling an increasing frustration with regulatory demands.
It seems set up to protect tenants and large scale landlords so inadvertently penalises small scale, genuine landlords.
Like landlords, agents feel there is a lack of support from the Government, with over half (50.2%) stating they are not supported at all. Landlords are both aware (81.4%) and concerned (79.7%) about the Renters (Reform) Bill, with 68.2% feeling either ‘quite’ or ‘very’ negative.
Although most agents (86.9%) are aware of the implications of the Renters (Reform) Bill, this suggests that some agents, albeit a minority, are not keeping informed about legislative changes that could impact their operations. Like landlords, a substantial 72.3% of agents are concerned about parts of the Renters (Reform) Bill, highlighting the potential impact they feel this legislation could have on their business practices.
The Bill will provide even fewer rights for legitimate landlords and protections that won’t help struggling tenants in poor quality properties.
The overwhelming majority (67.5%) of landlords indicate that legislation is the biggest challenge they face. This is a steep increase compared to our 2022 survey, when legislation was a top concern for well under half (39%) of landlords.
Housing law is strictly favouring tenants only and works actively against landlords - we are unable to protect our property, the tax system is punitive, and even the deposit of four weeks’ rent is not adequate when you are faced with excess damages. Our rights have been eroded while we are taking the financial risk in investing.
The biggest challenge faced by agents, who echo the sentiments expressed by landlords, is also legislation (58.3%).
Legislation is to improve standards and guard against rogue landlords, however the severity of the legislation is overbearing and penalises those landlords who are responsible and doing a good job.
On the question of whether agents should be licensed to operate, opinions amongst agents are almost equally divided, with 50.8% in agreement. This division indicates an ongoing debate within the industry about the need for formal credentials and the impact of such requirements on professionalism and service quality.
While 56.4% of landlords are not aware of landlord redress, 26.3% had a negative opinion, indicating a gap in knowledge or communication. However, 18.1% said they had a positive view, possibly due to beneficial experiences with redress systems.
Amongst agents there is a split in opinions on who should handle redress matters, with 41.2% preferring to be responsible themselves. This suggests that agents are willing to take on more accountability, potentially to maintain control over customer service experiences.
An overwhelming majority of landlords (80.5%) view the abolishment of Section 21 negatively, reflecting concerns over losing a key tool for property management and terminating a tenancy where needed.
Like landlords, agents predominantly disagree with the proposed change (71.9%). This suggests that agents value the flexibility that Section 21 provides in managing tenancies and the potential removal of this provision could be seen as limiting their operational effectiveness.
Totally unnecessary and unworkable. Without Section 21 tenants who choose not to pay will sit there for months while the legal process goes at snail’s pace. More landlords will just sell up.
Although the tenant base is diverse, it is overwhelmingly dominated by professionals (73.3%), followed by families (59.1%). Interestingly, 32.9% of properties are occupied by tenants with pets. 26% of properties are let to tenants on Universal Credit, revealing areas of potential growth and inclusivity.
The sentiment of landlords towards pets in properties is split, with a significant 41.7% saying they felt ‘indifferent’. But only 8.7% said they felt either strongly or very strongly in favour compared to 49.6% feeling strongly or very strongly against. This represents a shift from our 2022 survey, when landlords were almost equally divided on allowing pets in their properties.
This division reveals a disconnect between the growing number of pet owners seeking rented accommodation and the availability of pet-friendly accommodation, highlighting an opportunity for dialogue and education.
Despite the challenges, a hopeful 57.1% of landlords see themselves continuing their journey in the rental sector in three years’ time. This optimism, however, is balanced by the 42.9% who are uncertain about their future in the field. This is a significant decline on our 2022 survey, where a strong majority of landlords (80%) envisioned themselves continuing in their role.
Looking forward, agents have an average optimism rating of 6.4 out of 10 regarding their business prospects in 2024. This moderate optimism indicates caution but a general confidence in the market’s potential.
With respect to the property market's performance this year, agents are leaning towards a static viewpoint (44.4%), with 30% feeling positive. This may suggest that agents are anticipating a steady state of affairs without significant growth or decline.
A majority of agents (67.8%) envision themselves still being in the role in three years, suggesting their commitment to the sector despite the challenges faced.
When asked if they will do anything differently in their agency in 2024, 43% responded yes, hinting at an openness to adapt and innovate in response to the evolving market, for example:
“Social media marketing is needed for the future to be able to survive.”
“It is really just about holding firm in amongst all the changes.”
"More staff to cover the paperwork."
“I will continue to educate landlords and tenants. But I will be also trying to manage more HMOs.”
“Continue to drive individual and high levels of customer service in the most cost effective way.”
“Be more robust with tenants – make sure they are fully aware of their responsibilities and legal obligations, it’s never all the landlords’ faults!”
“Increasing rents on an annual basis which I have not done before.”
“Consolidating and waiting to see the detail of Renters Reform Bill.”
“We have raised our prices to ensure we survive.”
This year’s survey reveals a property sector that is grappling with significant challenges, primarily related to legislation and government support. There is a clear call for more straightforward legal processes and greater backing from the Government, with only 43.3% of landlords agreeing that the sector is fit for purpose and 86.4% not feeling supported by the Government.
And while initially 85.8% believed renting offered good value for money for tenants, only 51.7% found satisfaction with financial returns in 2023, raising questions about the market's sustainability. This could explain why the majority self-manage – they may not feel they can afford to eat into profits any further.
That said, it is surprising in an era of compliance and legislative reform, that 65% of landlords are still self-managing. However, although 84.8% express confidence in their property management choices, as the environment becomes more challenging, there are opportunities for agents who can take care of the complexities for their clients. Especially given that 67.5% of landlords identified legislation as the biggest challenge, overshadowing traditional concerns such as property maintenance and rent payments,
Despite all the issues identified, most landlords and agents intend to remain in the sector, driven by financial returns and the satisfaction of providing much needed housing. Awareness and opinions on landlord redress and specific legislative changes like the abolition of Section 21 indicate areas where further dialogue and policy adjustments are needed.
The willingness of the majority of both landlords and agents to continue in the sector, despite the ongoing uncertainty, reflects their commitment to the industry's future.
While I can’t offer the certainty that landlords and agents crave, I can provide reassurance that we at the Property Redress Scheme will continue to engage with the Government on their proposals, particularly on issues such as landlord redress, redress for leaseholders from their freeholders, property condition and material information.
Positively
Negatively
