Over 160 industry professionals joined Goodlord’s ‘2023 predictions’ webinar last month. During the session, they were asked for their thoughts on what this year is likely to bring.
Landlord numbers predicted to decline
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.
Greg Tsuman, Lettings Director at Martyn Gerrard, comments: “I do think inflation is here to stay. It is, however, worth remembering that bricks and mortar have previously proven to be a great long-term hedge against inflation.”
31% of agents are more optimistic and believe landlord numbers will stay the same this year, with 11% believing numbers will actually increase over the next 12 months.
William Reeve, Goodlord CEO, believes the pace of regulatory change, coupled with the new economic landscape, is continuing to push landlords out of the market.
He adds: “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.”
397 agents have so far signed an open letter to Michael Gove, calling for more support for the rental sector against a backdrop of rising pressures.
Agents predict rise in arrears
Agents believe these inflationary pressures and the cost of living crisis will also be felt in arrears volumes, with 66% expecting to see rent arrears to increase by up to 5% during 2023.
Greg comments: “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, Peter Knight, Founder of the Property Academy, 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. 32% of agents expect arrears levels to remain the same, with only 2% predicting that numbers will go down.
House prices predicted to drop
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.
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