New research reveals over half of landlords are pessimistic about the future of buy-to-let, with many fearing government meddling will make things even worse.

The stark warning comes from a major industry survey which found widespread gloom among landlords and letting agents.

The ‘State of the Lettings Industry Report 2024’, published by Goodlord and Vouch, lays bare the concerns of over 1,500 landlords, agents and tenants. It paints a worrying picture for anyone invested in the private rented sector (PRS).

Government to Blame?

Industry experts blame the government’s planned shake-up of the rental market for the deepening pessimism.

The scrapping of Section 21 ‘no-fault’ evictions is a particular bugbear. 70% of agents now believe this will harm the sector – up from 56% last year.

The controversial Renters’ Rights Bill, which will outlaw ‘no-fault’ evictions, is expected to become law by summer 2024.

William Reeve, chief executive of Goodlord, warned: “This year’s report comes at a critical time. We have a new government, major rental reforms about to become law and the worst housing crisis in a generation.”

Landlords and Agents Fear the Worst

He added: “This is creating huge pessimism and concern. The imbalance between housing supply and demand looks set to worsen, not improve.”

The survey also found:

• Landlords are fleeing the market: The so-called ‘landlord exodus’ is real and causing further problems in the rental market.
• Tenants’ finances are stretched: More tenants are struggling to pay rent, putting extra pressure on landlords.
• Demand is outstripping supply: There simply aren’t enough properties available to rent, leading to bidding wars and higher prices.

Tom Goodlord, managing director at Vouch, commented: “This report reveals an industry under immense change and pressure. The PRS is feeling the weight of mounting challenges.”

Tenants Reject Open-Ended Tenancies

Interestingly, the survey also revealed a mismatch between what landlords think tenants want and what they actually want.

The government’s plan to introduce mandatory periodic tenancies – meaning open-ended agreements with no fixed term – proved unpopular.

• Most tenants (58.5%) prefer fixed-term, renewable tenancies.
• Just 30% like the idea of rolling, open-ended agreements.
• Only 15% of tenants reported feeling ‘trapped’ by a fixed-term contract.

This suggests the push for mandatory periodic tenancies might be misguided and out of step with what renters want.