More landlords will quit in 2023 and rent arrears will rise – survey
Rising arrears and falling house prices will see more landlords quit the market this year according to research by Goodlord.
Rising arrears and falling house prices will see more landlords quit the market this year with six out of 10 letting agents (58%) believing rising interest rates and new regulation will encourage them to shut up shop.
The Goodlord survey of over 160 lettings professionals also revealed agents predict a rise in arrears caused by worsening inflationary pressures. And alongside the cost-of-living crisis almost seven in 10 (66%) expect to see rent arrears to increase by up to 5% during 2023.
DECREASE
Meanwhile nearly seven in 10 (67%) agents surveyed said they thought house prices would 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.
I do think inflation is here to stay.”
Greg Tsuman, Lettings Director at North London agent Martyn Gerrard, says: “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.
“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.”
Despite the general gloom three out of 10 agents were more optimistic and believed landlord numbers will stay the same this year, with one in 10 (11%) believing numbers will actually increase over the next 12 months.
DOWN
And three in 10 (32%) of agents expected arrears levels to remain the same, with 2% predicting that numbers will go down.
William Reeve, Goodlord Chief Executive, believes the pace of regulatory change, coupled with the new economic landscape, is continuing to push landlords out of the market.
He says: “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.”
You can watch the Goodlord recording of the 2023 predictions webinar HERE.
