Stagnating economic growth and the tenant fee ban are the biggest business challenges facing letting agents, according to a new report. Agents are particularly worried about what will happen to the buy to let market after Brexit.
The number of agents confident in their business prospects has dropped from 69 per cent in 2017 to 51 per cent, according to the 2018 State of the Property Nation report from online property portal Zoopla.
Other business challenges voiced by letting agents include:
- Not enough homes available to rent (49 per cent)
- Tax changes for private landlords (45 per cent)
- Too few potential tenants seeking homes (30 per cent)
More than a third of property professionals (39 per cent) are also concerned that home prices will fall over the next 12 to 18 months.
“Agents are also feeling the pressure in the rental market, with many believing that revenue from lettings will decrease,” says the report.
“This pessimism is a result of fewer rental properties on the market due to constraints brought about by regulatory and tax relief changes. The number of landlords buying new properties continues to fall.”
Many believe revenue from lettings will drop (38 per cent), while a quarter believe it will remain the same and a third predict an increase.
A similar number (37 per cent) feel that the number of rental properties coming to the market will decrease further.
Another change is that landlords and tenants are increasingly moving online – with online agents already now taking a 50 per cent share of the market.
The survey found 24 per cent of landlords rented homes out through an online agent, 23 per cent rented homes out directly and 47 per cent instructed a high street letting agent to act for them, while 44 per cent of landlords said that they will go online next time they are looking for a tenant.
“Young couples that are yet to have children are the biggest group active in the market – 53 per cent are renters – followed closely by young families. This is because many people look to buy property around big life milestones, like when getting married or having children,” says the report.