A survey of over 160 lettings professionals has shown that the majority expect to see more landlords leave the market in 2023, against a backdrop of rising arrears and falling house prices.
The industry professionals joined Goodlord’s ‘2023 predictions’ webinar last month. During the session, they were asked for their thoughts on what this year is likely to bring.
Over half of all letting agents, 58%, believe that landlord volumes will decrease this year, as rising interest rates and new regulation encourage more landlords to sell-up.
Greg Tsuman, letting director at Martyn Gerrard, commented. “I do think inflation is here to stay. It is, however, worth remembering that bricks and mortar have previously proven to be a great long-term hedge against inflation.”
Some 31% of agents are more optimistic and believe landlord numbers will stay the same this year, with 11% believing numbers will actually increase over the next 12 months.
Goodlord CEO, William Reeve, believes the pace of regulatory change, coupled with the new economic landscape, is continuing to push landlords out of the market, adding: “A lot of the new policies have been deterring or restricting supply – encouraging landlords to look elsewhere for how to deploy their capital. This obviously has an impact on stock.”
Almost 400 agents have so far signed an open letter to Michael Gove, calling for more support for the rental sector against a backdrop of rising pressures.
Agents believe these inflationary pressures and the cost of living crisis will also be felt in arrears volumes, with 66% expecting to see rent arrears to increase by up to 5% during 2023.
Some people believe that rent freezes are needed in the current climate, but Peter Knight, founder of the Property Academy, disagrees, as he believes the outcome is likely to be a “reduction in the number of properties that will be available” further exacerbating the sector’s supply and demand issues.
The survey also found that 32% of agents expect arrears levels to remain the same, with only 2% predicting that numbers will go down.
Some 67% of the agents surveyed said they think house prices will decrease by 5% or more in 2023, with this pricing decline already beginning to show, while just 15% of agents expect an increase of up to 5% or more and 17% expect it to remain the same.
So bored of these companies who know nothing about letting coming up with these stupid surveys.
I’ve been reading ‘landlords are all going to sell up’ articles for 3 years and you know what – they haven’t done so yet.
40% of landlords have no mortgage – why on earth would they sell?
Goodlord should stick to software and dial down the desperate PR.
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Depends were the property is. Licencing has driven out many landlords for a vast range of reasons but most notably …… top of our list is for those with no mortgage …… “stuff that idea, not interested, bye”.
30% of landlords have left over the last 3 years in our region and Zero BTL incoming.
Propertymark confirmed 49% reduction of rental properties March 2019 to March 2022.
With further regulation coming with costs, taxation hits and cost of living biting with existing tenant rent arrears added to the repossessions coming through from Covid backlash, affordability is the main issue that will drive many private landlords out of the market if they get burnt or think they will. BTL is a very big High Risk venture if you do not have reserve funds/protection.
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