Lettings professionals expect to see more landlords leave the market in 2023, against a backdrop of rising arrears and falling house prices, a survey by Goodlord reveals.
The survey, which took place during Goodlord’s ‘2023 predictions’ webinar last month, focused 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 regulations encourage more landlords to sell up.
Meanwhile, 31% of agents are more optimistic and believe landlord numbers will stay the same this year, with 11% suggesting numbers will increase over the next 12 months.
Goodlord chief executive William Reeve says the pace of regulatory change, coupled with the new economic landscape, is continuing to push landlords out of the market.
Reeve comments: “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.”
So far, 397 agents have signed an open letter to the UK’s secretary of state for levelling up, housing and communities Michael Gove, calling for more support for the rental sector against a backdrop of rising pressures.
Agents highlight that these inflationary pressures and the cost of living crisis will also be felt in arrears volumes, with 66% expecting to see rent arrears increase by up to 5% during 2023.
Martyn Gerrard lettings director Greg Tsuman notes: “I think more and more landlords are concerned about the cost of living crisis and how that will affect the tenant’s ability to pay their rent.”
However, Property Academy founder Peter Knight says he doesn’t think that “rent freezes” are the answer, with the outcome 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 revealed that 32% of agents expect arrears levels to remain the same, with only 2% predicting that numbers will go down.
A further 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.
Only 15% of agents expect an increase of up to 5% or more and 17% expect it to remain the same.
