The thoughts and opinions of landlords and agents in the private rented sector revealed
We gathered the thoughts and opinions of over 3,000 landlords and agents in the private rented sector in our sentiment survey.
At the beginning of 2022, 87.7% of agents felt that renting offered good value of money for their tenants and 81.2% were also happy with their own financial return. Despite most agents feeling renting offered good value for money, 60.8% of agents said that their opinions had changed since, many citing “large rent increases”, the rising cost of living and supply and demand issues as the main reasons for this.
Most HMOs rent with bills included, however with the rise in energy and living costs, it is getting harder and harder to make it worth doing as an agent, without extortionately raising rent.
However, several agents explained that they were trying to mitigate the impact of this for their landlords and tenants.
The landlords I work for are trying to maintain the rents at a fair level.
Over half of the agents surveyed (57.6%) said that they had witnessed a rise in their competitors going into liquidation in 2022.At the beginning of 2022, 91.5% of landlords had high hopes for their private rental sector investments and felt that renting offered good value for money for their tenants. Despite most landlords feeling that renting offered their tenants good value for money, 43.7% of them had changed their minds by the end of 2022, with many mentioning having to increase their rent due to the rise in inflation and mortgage increases and shortage of properties as the main reasons for this.
The numerous increases in mortgage interest rates have meant there is no alternative but to raise rents to stay afloat.
79.2% of landlords we asked were happy with the financial return they got from being a landlord at the beginning of 2022.
Despite agents’ initial concerns over the private rented sector offering value for money, 76.1% believe that the sector is fit for purpose.
I think generally landlords and agents want to deliver decent accommodation for tenants. Overall the sector is needed and mostly filled with good people.
However, agents still reported common concerns surrounding:
Landlords need more education. Too much compliance. Tenants able to go without paying rent with no repercussions. Takes too long to resolve issues when residents stop paying rent or anti-social activity.
Surprisingly, 72.2% of landlords feel that the private rented sector is fit for purpose. Their main reasons for this are it provides a regular income, and the current regulation protects landlords.
There are regulations in place to protect both landlords and tenants.
Of the 27.8% that feel it is not fit for purpose, their main reason is also due to legislation and believing there is too much in place. Other reasons include the Government being biased towards tenants and the spiralling costs associated with being a landlord.
Both the rental sector and home ownership sector vastly too over-regulated which is making them more unusable and expensive
Agents believed the three biggest challenges facing the private rented sector are legislation (24.7%), rent payments (23.9%) and property maintenance (16.9%).
New legislation being proposed or brought in under short timescales with little government support.
Landlords feel that the three biggest challenges facing the private rented sector are legislation (38.7%), rent payments (21.5%) and property maintenance (13.8%). Only a small number of landlords found that finding tenants (6.8%) and deposits (6.7%) are a current challenge they face.
Agents found finding and referencing tenants to be the best experience closely followed by finding and communicating with landlords and managing rent payments. In contrast, communication with tenants during the tenancy, complying with legislation and the end of tenancy process were the worst experiences when running their agency. We found that landlords had the best experience with finding and referencing tenants (36%). This was closely followed by managing rent payments (26.1%) and communication with their tenants during the tenancy (19.5%).Landlords found that dealing with the end of tenancy process (33.9%) and complying with legislation (42.5%) were their worst experiences.
Despite almost half of landlords (42.5%) stating that complying with legislation is their worst experience of being a landlord, 83.4% are confident they are compliant. Only 0.4% are not confident at all that they are compliant with the current legislation.
The majority of landlords like the income (37.9%) and capital appreciation (22.7%) most about being a landlord. Almost 20% (19.4%) like that they are housing and supporting tenants and 11% are happy they are contributing to the private rented sector.
Providing an exceptional end to end service to tenants and receiving the appreciation through referrals years later.
Landlords also expressed their concerns, with some claiming they do not like anything about being a landlord anymore.
Don't like anything about it, wish I didn't purchase a property in the first instance - feels a huge burden when it’s not your full time job.
Overall, 50.1% of agents felt very or quite supported by the Government with 24.8% feeling neither supported or unsupported and 20.5% feeling not very or not at all supported by the Government.Overall, 43.2% of landlords feel not very or not supported at all by the Government and 40.5% feel quite or very supported. And 16.3% of landlords feel neither supported or unsupported by the Government.
The legislation that is proposed is talked about for years and you are unsure what has been put into law and what was just proposed.
Almost half of landlords feel that the current private rented sector legislation hinders them (47.9%) mostly due to too many complex regulations.35.5% of landlords feel it helps them, their reasons mostly being that it protects the tenant and the landlord and helps to make sure the property being let is in a good condition. Some landlords are unsure whether the current legislation helps or hinders them (16.5%).
Legislation can help landlords understand contracts clearly and make transactions more open.
Over the last year, 44.4% of landlords feel very or quite positive about the industry changes in the private rented sector whereas 33.2% feel very or quite negative about the changes.
Agents' views on the abolishment of Section 21 were also close with 39.2% disagreeing with the abolition and 38.6% agreeing to this change. A significant proportion were indifferent, neither agreeing nor disagreeing with the abolition (22.3%).
Section 21 is vital for ending tenancies with undesirable tenants who cause issues for other tenants (especially in house / flat shares).
In contrast, many agents listed Section 8 as a better process.
Section 8 notice is better as it has more options and gives tenant peace of mind that they are not going to be kicked out unless there is a problem.
And a subset mentioned that they “...have not had a need to use section 21” and that they “...work hard to keep good tenants [and] evicting tenants is only important when they are bad tenants.”
Almost half of landlords surveyed disagree with the abolishment of Section 21 (49.2%) and 33.9% of landlords agree to the change. A small proportion were indifferent, neither agreeing nor disagreeing with the abolition (16.9%).
As an agent, what is your view on agents having to be licensed to operate?Out of the 1001 agents surveyed, 62.5% agreed with agents having to be licensed to operate with just under 25% disagreeing completely. A further 12.8% neither agreed nor disagreed with agent licensing. It was a close run for agents when it came to who they believed should be responsible for dealing with redress matters.Just under half (44%) of agents suggested that they would prefer to be responsible for redress matters while a close 42.8% believed that it was the responsibility of the landlord. With 13.3% being unsure of whose responsibility this was. As a landlord, are you aware of landlord redress?Of the landlords surveyed, 65.8% are aware of landlord redress and what this means for landlords.
Of those that are aware of landlord redress, 59.7% are feeling positive about it while a similar number of landlords are indifferent (20.9%) or have a negative opinion (19.5%).
Of the 2,500 landlords that we asked, the majority choose to self-manage their property portfolio (56.3%).
Only 7.2% of landlords use an agent on a let only basis, with 16.9% opting for a fully managed service and 19.6% combining self-management with the use of an agent.
It’s good to see that an overwhelming 81.5% of landlords are confident with their choice of property management and only 5.1% are not confident with their current choice.
More than half of landlords let their properties to families (58.4%) and professionals (51%). Interestingly 38.6% of landlords said they are ‘indifferent’ to whether their tenant has a pet in their property. Almost an equal number of landlords are against (31.1%) as they are for tenants with pets in their property (30.4%). Of the landlords that we asked, 29% currently let their property to tenants with pets.
A lot of pet owners are irresponsible thus allowing pet damage to property. Then there’s the allergy implication for subsequent tenants.
There aren't many landlords in the sector that allow pets which gives me a competitive edge when tenants are viewing my properties. As a pet lover myself this isn't something I want to take away from my own tenants
On a scale of one to ten, most agents were fair to very optimistic about their business prospects in 2023 with 46.6% of agents voting for an eight or more on the scale.
Compared to their thoughts on their business prospects in 2022, 60.4% of agents said that their predictions were correct.
With 22.8% saying they were somewhat correct and 16.8% reporting they were wrong about their predictions.
There are some fundamental changes in the pipeline to the legal framework under which the private rental sector will operate. And their journey will definitely start in the next twelve-month period.
When asked their view on how the property market will perform in 2023, 36.8% of agents believed there would be a positive performance. A close 34.3% believed a negative performance was likely with 29% believing it would remain static or being unsure.
Despite landlords expressing their concerns with legislation and not feeling supported by the Government, almost 80% (79.9%) have said they still envisage themselves being a landlord in three years’ time. Of the agents surveyed, the majority (76.7%) envisaged them still being an agent in three years' time.
However 68.9% did state that they would be doing things differently in their agency in 2023, such as:
Utilising technology to support their agency
“More systems to help with compliance.”
Expanding reach and using marketing to support client acquisition
“Targeting landlord growth.”
Cost savings
"Continue to spend the same amount as last year, in order to save manpower and resources.”
Reviewing policies
"Reviewing pet policy, reviewing EPC ratings, periodic tenancies.”
Agents explored a number of changes that they would like to change in the private rented sector. This included:
Increasing the property supply
“More properties on the market.”
Section 21
“Improve speed of fault evictions, balance of power between landlords and tenants.”
Legislation
“More government assistance to bring in clearer, easy to understand and fairer legislation.”
Environment
“Control rental prices compared to the property location, condition and services being provided.”
Relationships
“Simplify the process of finding tenants, so that landlords and tenants can communicate more efficiently.”
Landlords stated the one change they would make to impact landlords in 2023 would be:
Rent changes
“Introduce government-guided prices and raise rent prices accordingly.”
“A government that understands the difficulties landlords experience and to put legislation in place to even out the scales.”
Tax
“Reverse the tax change where mortgage interest cannot be deducted as an expense like with other businesses.”
