Four in ten letting agents have considered ceasing trading over the past year amid falling profitability.
One in five agents lost 20% or more of their revenue as a result of this year’s fees ban, and only 2% saw no loss in revenue at all.
To counteract the loss of revenue, 80% of agents raised landlord fees and 60% introduced new revenue streams, while the same proportion cut costs.
The new annual Fixflo Lettings Report, based on responses from 443 agents and 223 landlords, also found evidence that the industry is coming to terms with the effects of the ban.
While 39% of agents said they had thought about quitting, this was actually down from the 42% who contemplated it the year before – ahead of the ban.
The current issue of most concern is landlords quitting or reducing their stake in the sector.
Over a quarter (27%) of landlords are planning to sell at least some of their rental properties.
The phased abolition of tax relief on mortgage interest is cited as one concern, and the impending abolition of Section 21 is another.
Responses from letting agents showed their concerns, with almost three-quarters reporting that “landlords selling their properties” was the main reason they lose clients.
Almost all landlords (89%) said they had found owning and letting properties harder over the past year.
Fixflo has also released a new report on the leasehold and block management market.
It surveyed 207 individuals representing 170 leasehold and block management companies and 37 industry suppliers.
The report found low profit margins in firms with over £500,000 turnover, and average deficits of 12.5% in those with lower turnovers.
The report also found demanding workloads, with companies typically growing their businesses but not their profits.
In almost half of firms, one property manager looks after fewer than 20 buildings, but about a quarter of firms have at least 30 buildings under one property manager, and 7% have each property manager looking after 50 buildings or more.
The report identifies build to rent as a “£2.6bn missed opportunity” for the sector, saying that 70% of block management companies have not expanded into build to rent.