Almost half of tenants are now in “rent poverty” due to rent increases, the Goodlord & Vouch State of the Lettings Industry Report has found.
Almost half of tenants surveyed (48%) said they are now spending more than 40% of their income on rent.
Most landlords have upped rents, as only a fifth (18.5%) said they left the rent alone on any of their properties in the past year.
William Reeve, chief executive of Goodlord, said: “This year’s report doesn’t give us a lot to be cheerful about. The whole sector is under intense pressure and the light at the end of the tunnel remains fairly dim.
“Overall, the country needs more rental homes to alleviate the supply/demand imbalance – which in turn requires house building, streamlined regulations, and better landlord incentives.
“While letting agents themselves will generally continue to be resilient – as they have so consistently demonstrated in recent years – neither landlords nor tenants have much to be optimistic about right now.”
A huge percentage of landlords – just under a third of those surveyed (30%) – said they had either sold one of their rental properties or put one on the market in the past year. A further 17.4% of landlords said they were considering reducing their portfolio in the coming year.
More than half of landlords (56%) planning to downsize or exit the market said incoming legislation – such as the Renters’ Rights Bill, in particular the abolition of Section 21 – was the primary reason.
Over half (52%) also said new rules around energy efficiency standards would be a reason for leaving the sector.
More than half (58%) of letting agents reported a decrease in the number of available properties – with 37.4% noting a “significant” decrease.
Tom Goodman, managing director of Vouch, said: “The stark takeaway of this report is how intertwined the fates of the PRS stakeholders are. Landlord pressure is felt directly by tenants and vice versa. Against the backdrop of these rising challenges, agents are handling a more complex workload but also navigating booming demand from tenants.
“We need to start considering the bigger, more interconnected picture when it comes to regulation and reform. We need the next chapter of the PRS to be one which benefits all. The focus must be creating a foundation on which everyone can thrive.”