"Our steadfast commitment to early resolution has proven effective, reflecting a shared willingness among parties to reach amicable solutions"
- Sean Hooker - Property Redress Scheme
The report, now in its tenth year, reflects on the past year in the property sector and looks at some of the major things on the horizon that property agents need to be prepared for in 2024.
The 2023 report highlights that membership numbers grew by 7% to 17,459 agents, including 1,397 registered branches throughout the UK.
Complaints
Complaint enquiries rose throughout 2023 by a fifth compared to the previous year. By December 2023, the PRS had investigated 55% more cases than the previous year. The average rate of complaints for each member reduced to a little over eight per cent, down from over 10% in 2022
Complaints were completed, on average, in around 40 days from the time the PRS received them. This is consistent with the previous year.
The top three complaints for lettings were: holding deposits, poor service and management, and tenancy payments and rent collection.
Resolutions
Yet, despite increasing complaint numbers, the PRS has continued to successfully resolve around 50% of cases at early resolution. Early resolutions awarded a total of £359,426 in 2023, which is a small increase on 2022 (£353,053). An early resolution is a settlement made between the parties meaning the PRS does not have to make a formal decision.
Other highlights of the report, which can be read here, included:
A 24% rise in the number of decisions during 2023 than in 2022, with the total figure awarded for decisions reaching £953,062.24 - up by 95% from 2022 (£489,916)
The average award was £1,832.81 and the total figure awarded for early resolution and decisions combined was £1,312,488. 85% of consumers received the full amount they were owed. This was a small reduction from more than 90% in 2023, reflecting both the increased volume of complaint enquiries coming to the PRS and the higher proportion of these that are being investigated
58 agencies were expelled, compared to 61 in 2022, highlighting the quality of the compliance process.
Sentiment in the PRS
For the second year, the report also features the results of the sector’s largest annual sentiment survey, which reveals what the reality is like on the ground for landlords and agents.
Highlights of the survey, which features the views of 2,700 landlords and agents, included:
Self-management
An increase in self-management from 56.3% in 2022 to 65% in 2023, which in the era of compliance and legislative reform is surprising. 19% of landlords adopt a hybrid approach, perhaps something more may be considered in future. However, it would seem landlords like self-managing, with a substantial majority (84.8%) expressing confidence in their property management choices
Fitness for purpose
Only 43.3% of landlords and 52.2% of agents feel the sector is ‘fit for purpose’. Reasons cited include regulation, poorer tax breaks, increased mortgage costs, upgrade costs and removal of Section 24. This is a significant drop on last year when a strong majority of agents (76%) and landlords (72%) felt it was fit for purpose, citing regular income and protective regulations as key reasons
Value for money
At the start of 2023, the majority of landlords felt that renting offers good value for money for tenants (85.8%). Many offer below-market rents, have long-standing tenants, or have absorbed mortgage interest increases. Just 14.2% of landlords changed their minds over the year.
73.2% of agents also believed at the beginning of 2023 that renting offered good value for money for tenants (compared to almost 90% at the beginning of 2022), but 23.2% of them have since changed their opinion. This is due to factors such as a reduction in supply and tenants outbidding each other
Financial return
Despite the majority feeling that renting offers good value for money for tenants, only 51.7% of landlords were satisfied with their financial return in 2023 (a drop from 79.2% at the beginning of 2022), compared with 63.1% of agents
Government support
61.9% of landlords said they felt ‘not supported at all’ by the Government (an increase from 43% in 2022) with 78.6% saying that legislation ‘hinders’ landlords, compared with 48% in 2022. 50.2% of agents feel they are not supported at all by the government.
Biggest challenge
The overwhelming majority (67.5%) of landlords indicate that legislation is the biggest challenge they face. This is a steep increase compared to the 2022 survey when legislation was a top concern for well under half (39%) of landlords.
Agents also said that legislation is the biggest challenge (58.3%), overshadowing traditional concerns such as property maintenance and rent payments. This contradicts why the majority of landlords still choose to self-manage. However, despite finding legislation challenging, 89.4% of landlords said they are very or quite confident in compliance with legislative requirements
Section 21
A majority of landlords (80.5%) and agents (71.9%) view the abolishment of Section 21 negatively. This is a significant increase from 39.2% of agents and 49.2% of landlords in our 2022 survey
Pets in lets
Only 8.7% of landlords are in favour of having pets in their property, compared to 30.4% in 2022. 49.6% said they were strongly or very strongly against it, a slight increase from the 40.1% who were strongly or very strongly against it in 2022.
Future outlook
Despite challenges, 57.1% of landlords see themselves continuing their journey in the rental sector in three years’ time. This is a significant decline on our 2022 survey, where a strong majority of landlords (80%) envisioned themselves continuing in their role. A majority of agents (67.8%) see themselves still being in the role in three years compared to 76.7% in 2022
In summary, the survey highlights a pivotal crossroads for the PRS, with a clear call for legislative reform and greater government support. Compliance with regulations emerges as a significant burden, necessitating streamlined processes and policy adjustments. The sector's resilience is evident, but concerns over financial sustainability and market viability persist.
Sean Hooker, (pictured) Head of Redress at the Property Redress Scheme, had this to say: “The notable increase in financial awards underlines the growing volume of complaints, compounded by a lack of engagement from a minority of members. Despite this, it's encouraging to observe a reduction in complaints per member, indicative of improved efficiency in our investigative processes. Our steadfast commitment to early resolution has proven effective, reflecting a shared willingness among parties to reach amicable solutions.
"As we strive to support, educate, and improve industry standards while continuing to clamp down on some of the poor practices that ensue, our adoption of innovative approaches like mediation and early resolution has yielded positive outcomes, fostering greater satisfaction among stakeholders.
"This report reaffirms our dedication to growth, innovation, and excellence, positioning us as the premier avenue for swift and effective resolution of property disputes. Our flexibility and cost-effectiveness make us the preferred choice for businesses of all sizes, further cementing our reputation for exceptional service and professionalism.”
