4 key findings from the English Private Landlord Survey

On 23 June 2022, the Department for Levelling Up, Housing and Communities (DLUHC) released its English Private Landlord Survey, the first in 3 years. Here are some of the key insights it offers into the state of the private rented sector, including portfolio sizes, exit plans and more.

1. 1 in 10 landlords were looking to sell off their portfolios

One of the most significant findings was that 10% of landlords were planning to exit the market, while an additional 12% were looking to reduce the size of their portfolios. Despite rents being at an all-time high, many landlords are choosing not to take advantage of this boom and increase their portfolios. Why could this be? The survey points to a number of factors. 11% of those surveyed were looking to increase their portfolios, and these were generally those with a larger number of properties.

2. Increased legislation is discouraging landlords

When asked their main reason for exiting the market, more than half (55%) of the landlords planning to do this identified recent legislative changes, followed by expected legislation in the occupier’s favour, such as the abolition of Section 21.

3. Section 21 eviction notices play a vital role

Over two-thirds of landlords surveyed said they had evicted occupiers using a Section 21 notice, which helps to explain their hesitance to stay in the market when they are no longer able to use them. Following an eviction freeze, the global pandemic left many landlords with non-paying occupiers unable to draw an income from their property. This experience has likely shown them how important it is to be able to carry out efficient eviction proceedings without involving the courts.

Although there has been backlash from landlord advocacy groups about increased legislation, the government has insisted the sector had nothing to worry about. A spokesman for the Department for Levelling-Up, Communities and Housing said “good landlords” had nothing to fear from the reforms, which were designed to “give occupiers greater security to challenge unreasonable rent rises and poor practice”.

4. Most landlords own just one property

The study found that 45% of landlords own just one property. The remaining 38% of landlords owned between two and four properties, and 17% of landlords owned five or more properties.

ARLA Propertymark president, Maxine Fothergill, commented: “As highlighted in the report, a large proportion of private landlords are retired, and the majority take home a gross profit of £20,000 or less a year and rely on rent as an income.

“Consequently, as landlords are persistently hit with legislative and tax changes, financial obligations are growing, and incentives are non-existent, pushing many to withdraw their homes from the sector.

“Landlords have reported within the survey that for those who are going to leave the sector, recent and forthcoming legislative changes were the driving key factor to doing so. Urgent action is needed from the UK government to maintain existing investment as any further reduction in supply could have a detrimental ramification for the housing sector, and a rise in those facing homelessness will be inescapable.”

What’s the future of the sector?

The reduction in landlords naturally means a reduction in properties. Research from Propertymark reveals that the number of homes available for rent via letting has halved since 2019. Of the 440 letting agencies spread across 4,000 branches throughout the UK, on average, letting agencies have seen the number of available rentals on their books halve, from over 30 to just 15.

With fewer players in the market and those remaining professionalising and expanding their portfolio, thus making individual landlords ever more valuable, lettings agents need to create a competitive advantage to attract and maintain these high-value clients while keeping existing clients happy.

To find out more about Section 21 and how other changes set out in the Government’s June 2022 white paper will affect the private rented sector, watch our on-demand webinar Quarterly Legal & Compliance Updates for Letting Agents 2022 Q2 with lettings law expert David Smith, Partner at JMW Solicitors.

* James Dilgul is the Head of Marketing at Fixflo