A new survey shows that the landlord exodus is far from over – and agents are paying the price with reduced revenue and smaller portfolios to manage.
The annual Goodlord state of the lettings industry survey shows threat in total, a third of all landlords (35%) have either sold up (19%) or actively tried to sell (16%) in the last 12 months.
Nearly half of landlords selling up (44%) had sold just one property, but a significant minority (14%) said they’d taken five or more homes out of the market – representing a major threat to supply.
Four out of five landlords actively reducing their portfolios cited the Renters Rights Bill as a key reason for quitting. The abolition of Section 21 is the measure causing most concern. 80% of landlords say it will have a negative impact on the PRS.
The number of landlords heading for the exit is putting huge pressure on tenants, who are scrambling to find and affordable properties, says Goodlord.
Half of tenants questioned for the survey (48%) said they found it difficult to find a property over the last 12 months. Letting agents agree – over two-thirds (67%) reported an increase in tenant demand this year, with a third (30%) of agents saying the number of properties available to rent had declined.
In their attempts to secure a property, two in five renters (40%) say they’ve paid more than the standard month’s rent up front to try to beat the competition. This, however, will be banned under the Renters Rights Bill – potentially putting certain tenants at a disadvantage.
With over 40% of renters saying they were unlikely to buy their own homes within the next five years, the supply and demand pressures on the sector look unlikely to abate anytime soon.
With new rules around rental rises set to be introduced with the Renters Rights Bill, prices could be unintentionally driven up across the market.
The ban on over-bidding for properties risks a rise in “gazundering” – where landlords increase asking rents in order to leave space for downwards negotiation. 1 in 5 landlords (20%) plan to advertise higher prices to hedge for tenant gazundering. A rise in gazundering could skew market metrics, leading to rapid rise in rent escalations as landlords and agents seek to keep rents in line with local averages.
And despite almost half of landlords (40%) saying they hadn’t increased the rent for existing tenants in the past year, new rules meaning rental rises can only happen annually (via a Section 13 notice) could encourage more landlords to increase rents each year as standard, to avoid missing this window.
Going forward, tenants will have the right to appeal any rent increases. While three-quarters (76%) said they would only do so if they believed an increase was unjustified, an eyebrow raising 1 in 5 (22%) of tenants said they would always appeal an increase. This suggests that the First Time Tribunal could see cases spike, causing long delays in judgments and potentially leaving uninsured landlords out of pocket in interim.
The report reveals that the abolition of fixed-term tenancies will have a significant impact on revenue. On average, agents say a quarter (27%) of their revenue comes from renewals. And it’s higher in London, with agents in the capital saying that renewals account for37% of their income.
With the Bill set to mark the end of fixed-term tenancies, agencies will need to reassess revenue models to fill this major void – meaning a revenue crisis could be on the horizon for a large number of agencies.
As they seek to drive efficiencies, this year’s report reveals that agents are starting to embrace AI – with adoption more widespread at larger agencies. Nearly half of agencies (47%) report experimenting with AI, with 22% saying they’re using it in their day-to-day operations. However, only 7% say it has transformed their workflows and improved the client experience.
With a range of pressures facing the market, it’s no surprise that only 13% of landlords currently describe themselves as optimistic about the sector.
However, agents are feeling slightly cheerier. Optimism amongst letting agents has edged up for the first time in five years. One in five agents (20%) describe themselves as “somewhat optimistic” about the future of the sector, with a further 7% saying they were very optimistic – representing a 4% increase in positive sentiment compared to last year.
You can read the full report at: https://www.goodlord.co/state-of-the-lettings-industry-report-2025
