Renting realities - Key challenges
Discover the key challenges landlords, agents and tenants are facing
Agents, who serve as vital intermediaries in the private rented sector, face a range of challenges. The top concern identified by agents was overwhemlingly keeping up with regulatory changes (76.2% compared to 58.3% in 2023), followed by a shortage of rental stock (61.2%), and increased costs (46.2%). Energy efficiency requirements (33.8%) and finding good tenants (28.8%) were also significant challenges.
Regulatory compliance also emerges as by far the biggest challenge for landlords (34.3%), followed by rising costs (18.5%), tax changes (15%) and energy efficiency requirements (8.1%). However, in 2023, 67.5% of landlords indicated that legislation was the biggest challenge, which was a steep increase compared to 2022, when legislation was a top concern for 39% of landlords. The latest survey suggests that while landlords remain predominantly concerned about compliance, they are coming to terms with the fact that change is on the horizon, but are also navigating other pressing challenges such as rising costs and other economic impacts.
Rising rents were cited as the biggest challenge by 88.2% of tenants, with 49.6% reporting that if they could buy they would. Although 58.9% of landlords and agents feel that renting offers good value for money, this is a decline from the beginning of 2023, when a higher majority of landlords (85.8%) and agents (73.2%) felt that renting offered good value for money for their tenants.
At that time, many landlords had not 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 and not passed them all on to the tenants.”
This change in landlord and agent opinion could reflect market shifts such as the continued reduction in supply, which has been causing tenants to outbid each other to secure a property, although the practice of ‘bidding wars’ will be banned once the Renters’ Rights Bill becomes law.
“The economic and legislative factors have pushed rents up massively. Rents are now too high, driven by lack of supply and tenants cannot afford them.”
For tenants, the second biggest challenge is a shortage of properties (49%) followed by lack of long term security (43.6%). Poor maintenance and repairs were also a significant concern for 31.7% of tenants. Surprisingly, given the dominance of the threat of eviction and its impact on tenants’ lives in the media, only 17.7% of tenants cited this as one of the three biggest challenges renters face today. Importantly, given the introduction of Awaab’s Law to the private rented sector once the Renters’ Rights Bill becomes law, 18% of tenants selected damp and mould as one of the biggest challenges they face.
Over half of tenants (54.3%) stated that their experiences as renters had deteriorated their outlook on the private rented sector, while a significant majority (67.2%) of landlords said the sector had deteriorated, with just 11.1% saying it has improved and less than a fifth predicting that the rental market will continue to be a good investment in the next five years.
Despite this, just over half of landlords (51.2%) envisage themselves being a landlord in five years’ time – a slight drop on 57.1% in 2023 but a significant decline on 2022 when 80% envisioned themselves continuing in their role - with those who don’t citing the abolition of Section 21 (29.3%), regulatory changes in the Renters’ Rights Bill (24.3%), economic reasons such as tax and interest rates (21.9%) and retirement (9%). This suggests that those who are choosing to remain in the sector are in for the long term.
The survey also revealed that over half (52%) of agents are unconfident about the long-term profitability of the rental market. Legislative changes have had a substantial impact on agents’ operations, with 66.2% reporting that measures such as the impending Renters' Rights Bill and the tenant fee ban have negatively affected their business. Despite these broader concerns, over half (58.2%) like working in the rental market.
