The State of the Lettings Industry report 2024: How to stay ahead of the market changes.

The annual State of the Lettings Industry report has been released by Goodlord, providing crucial insights into the private rental sector (PRS) with input from over 1,500 agents, landlords and tenants across the UK. The report explores the significant challenges, emerging trends, and potential opportunities that are currently shaping the PRS and is a ‘must-read’ for all investment property owners.

We’ve thoroughly reviewed the report and summarised the key points below:

1. Landlord Exodus and Supply Crisis: Almost half of landlords are exiting the Private Rented Sector (PRS), with more than a third selling properties. This has led to a significant reduction in rental property supply, contributing to rent increases as tenant demand continues to rise. The report highlights five reasons landlords are leaving: increasing regulation, economic pressures, energy efficiency standards, shifting to short-term lets, and taxation.

2. Affordability Crisis for Tenants: Tenants are facing skyrocketing rents, with half spending more than 40% of their income on rent, classifying them as being in "rent poverty." Many tenants, particularly those on lower incomes, struggle with rental costs, creating financial distress.​

3. Government Reforms and Uncertainty: The Labour Party's Renters’ Rights Bill is causing anxiety across the industry. The proposed abolition of Section 21 (no-fault evictions) and changes to tenancy structures, such as periodic tenancies, are widely unpopular among landlords and letting agents. Over two-thirds of agents believe these reforms will reduce the number of rental properties available.

4. Energy Efficiency Standards: Labour’s plan to raise the minimum energy efficiency standards (EPC Band C) by 2030 is set to affect two-thirds of landlords, with many facing high upgrade costs. This initiative is part of the government’s broader "Warm Homes Plan," but 52% of landlords indicated that such regulations would drive them out of the sector.

5. Mental Health and Stress in the Industry: A significant proportion (33%) of letting agents report high stress levels, compounded by regulatory uncertainty and the administrative burdens of compliance. Smaller agencies, in particular, are expected to be hardest hit by impending reforms, with some considering leaving the sector entirely