A significant proportion of letting agents are preparing to increase their fees in response to additional administrative requirements introduced by the Renters’ Rights Act, according to new research from lettings technology firm Goodlord.
The survey of 2,650 agents, landlords and tenants reveals growing tensions in the private rental sector, with landlords already expressing dissatisfaction with current fee structures. Some 59% of landlords cite high fees and poor value as their primary frustration, whilst only 6% report being very satisfied with value for money from their agents.
Market implications
The timing of potential fee increases presents challenges for the sector. Goodlord’s report, titled ‘Is Renting Broken?’, suggests that raising fees against a backdrop of existing landlord dissatisfaction could prompt some property owners to either self-manage their portfolios or exit the private rented sector entirely.
The findings come as rental price growth shows signs of stagnating, adding further pressure to landlord returns. Meanwhile, buy-to-let lending activity has increased, though remortgaging rather than new purchases dominates the market.
Three quarters (76%) of agents surveyed describe experiencing an ‘admin avalanche’ in their daily operations. This administrative burden appears to impact service delivery, with 52% of tenants identifying prompt repairs as their most important improvement need, and 46% reporting frustration with slow maintenance responses.
Industry response
Tom Goodman, MD B2B at Goodlord, stated: “The limits in this report are not abstract challenges. They are the daily reality of agents, landlords and tenants navigating a market under more pressure than at any point in a generation.”
William Reeve, CEO at Goodlord, added: “The rental market is experiencing a once-in-a-generation transition. It’s a matter of urgency that the rented sector responds proactively in a way that builds a better market for the next generation to come.”
The research suggests agents face a delicate balancing act between covering increased operational costs and maintaining landlord relationships at a time when property market transactions remain subdued. The potential for landlord churn presents particular risks as the sector adapts to new regulatory requirements.
