A recent survey of more than 14,000 respondents in the private rented sector, including letting agents, landlords and tenants, has found that current legislation is the greatest challenge facing the sector.
Some 76% of respondents feel legislation is the greatest challenge facing the sector at the moment, which will come as little surprise to many letting agents.
This sentiment is linked to the vast majority – 90% – of landlords and agents feeling unsupported by the government and a perception that policies are anti-landlord and pro-tenant.
A recent survey conducted by mydeposits and Ome sought to gain an overview of the private rented sector from those closest to it. It considered factors such as the relationship between landlords, agents and tenants, challenges and changes in the market, the impact of the pandemic and respondents’ future plans.
The majority of letting agent respondents – 95% – were smaller agents with between one and five branches. When asked what the three worst things currently facing the rental market are, 26% of agents listed rent arrears, 24% identified uncertainty around Covid-19, wile 20% pointed to changes to eviction protocol.
Suzy Hershman, head of dispute resolution at mydeposits, said: “Since all of these factors are linked in some way to restrictions placed on landlords and letting agents as a result of the pandemic, it is easy to see why 76 per cent of agents and landlords believe legislation is the greatest challenge facing the sector and consequently why they do not feel supported by the government.”
Yet despite these findings, and contrary to the common misconception that landlords and agents often sit on opposite sides of the fence to tenants, overall, all parties seem to rate their relationship with the other positively.
Some 69% of letting agents and landlords rated their relationship with tenants nine or ten out of ten, and on average tenants rated their relationship with their landlord 7.4 out of ten.
Good news for letting agents is that even though many landlords – 65% – feel the industry has changed for the worse for reasons predominantly linked to regulation, legislation and tax, 79% still plan to remain landlords over the next five years.
Tenants, on the other hand have aspirations to move out of the sector, with 67% hoping to be able to purchase their own home in the future.
Affordability was clearly highlighted as an issue for tenants, both as a barrier of entry to the rental market and to home ownership. Therefore, it is surprising that only six per cent of landlords, agents and tenants have used a deposit replacement service, which can aid cashflow for tenants and give landlords and agents an opportunity to offer choice when it comes to deposit options.
Whilst 31% are actively interested in trying a deposit replacement, it seems there is a lack of understanding and knowledge around what deposit replacement options are.
Hershman, added: “In spite of challenges faced including new legislation, rent arrears, and evicting tenants, it is evident that the majority of landlords want to remain in the sector which is positive for letting agents. However, a large percentage of landlords are self-managing and therefore there is scope for agents to up-sell and show their value to landlords in these challenging times.
“From a tenant’s perspective, the cost of renting is a key factor for those with a negative outlook of the sector. Conversely the high costs and affordability issues felt by tenants can result in rent arrears for agents and landlords, making the problem cyclical. However, renting is also providing a flexible solution to those who cannot afford to buy.”
Matthew Hooker, co-founder of Ome, commented: “As we emerge from the pandemic and the government gets back on track with making further changes to the landscape of the private rented sector, our sentiment surveys will provide valuable insights into the views of landlords, tenants and agents and the changes that could have a positive impact on reducing the challenges faced by all parties.”
Comments (3)
LL aren’t concerned with relevant regulations.
However LL do have major issues with the completely dysfunctional repossession process.
It is simply inexcusable that the legal process prevents LL from repossessing their rental properties from feckless rent defaulting tenants in a timely fashion.
Govt effectively sanctions this fecklessness.
It simply shouldn’t be allowed.
A LL should be able to repossess a rental property within 45 days of first rent default.
That period includes 2 months of defaulted rent and a 14 day notice period from the 2nd months rent default.
There is no need for any Court Action.
This repossession process only to be used for rent defaulting.
All other repossession circumstances should be by the S8 process.
Feckless rent defaulting tenants cost LL £9 billion in losses every year.
Just this change would transform the PRS for the better.
It would mean LL could risk taking on dodgy tenants who would at last find LL able and willing to take them on.
Essentially it would be a 45 day gamble for LL.
Most wrongun tenants stop paying rent so at least they could be got rid of quickly.
Just this simple change to the repossession process would ensure that LL would have a reason to stay in the PRS.
Inability to repossess quickly is forcing LL to quit the PRS.
Govt won’t facilitate quicker possession because it knows it would suffer the £9 billion annual losses and naturally doesn’t want to!!
So using the dysfunctional legal process it forces LL to take the losses.
Of course Govt never mentions to the taxpayer that by ensuring LL suffer these rent losses that the Treasury loses billions in tax revenues that would have been paid as a result of taxing those £9 billion of rent losses.
I’m sure the taxpayer is unaware that they suffer a larger tax burden because of feckless rent defaulting tenants.
Perhaps if they were aware they may not have so much antipathy towards LL and support timely repossession from rent defaulting tenants.
But politically Govt will NEVER facilitate quick eviction.
Consequently the PRS will continue it’s gradual decline.
The only ones I have had trouble with, are the ones that shouldn’t be in rentals from the beginning be it Landlord or Tenant with the wrong attitude. Government needs to start supplies for their own social housing and not forcing it onto the PRS. Often the bad tenants are the ones they have kicked out. Responsible Landlords haver nothing to worry about regulations. As for Covid on-hold eviction strategy that is very debateable, as most of our problems are not Covid related.
Deposit replacement schemes are not for everyone.