"Landlords are deeply disillusioned, with the Renters’ Rights Bill hastening their decision to exit the market. And agents are facing tough headwinds and escalating pressure on their bottom line, making finding new revenue streams and routes to efficiency an absolute imperative"
- William Reeve - Goodlord
Goodlord’s 2025 State of the Lettings Industry report offers insights from more than 2,750 landlords, letting agents, and tenants across the UK, revealing a market under mounting pressure.
A third of landlords have sold properties or attempted to do so in the past year, with 14% selling five or more homes. Tenant demand is rising, with half reporting difficulty finding properties and a third of agents noting higher arrears. Agencies are also preparing for regulatory change, as the end of fixed-term tenancies could cut revenue by up to a quarter, and nearly half are experimenting with AI to improve efficiency.
Landlord exits and supply pressures
The report finds that 35% of landlords have sold or actively tried to sell in the past 12 months. Nearly half of those selling (44%) sold just one property, while 14% sold five or more, creating a major threat to supply. Four in five landlords reducing their portfolios cited the Renters’ Rights Bill as a key factor, with abolition of Section 21 no-fault evictions causing the greatest concern.
Rising exits are intensifying pressure on tenants. Almost half (48%) reported difficulty finding a property in the past year, and two-thirds of agents (67%) observed higher tenant demand. Meanwhile, 30% of agents said the number of available properties had fallen. In attempts to secure homes, 40% of renters paid more than the standard month’s rent upfront, though this practice will be banned under the new legislation.
Renters’ Rights Bill and potential price effects
New rules on rental increases could unintentionally drive up prices. The ban on over-bidding risks more “gazundering,” where landlords inflate asking rents to allow for negotiation. One in five landlords (20%) plan to advertise higher rents to hedge against this. Although 40% of landlords had not raised rents for existing tenants in the past year, the Section 13 notice system, which limits increases to once annually, could encourage more standard annual rises.
Tenants will have the right to appeal rent increases, with 76% saying they would only appeal if they felt the increase was unjustified. However, 22% indicated they would always appeal, potentially causing tribunal delays and leaving uninsured landlords exposed.
Tenant finances and arrears
Financial pressures on tenants remain high. Almost half (42%) of renters are in rent poverty, defined as spending 40% or more of gross income on rent, a slight decline from last year’s 48%. Among those earning £20,000 or less, nearly three-quarters (73%) are in rent poverty. A third of tenants said a 3% rent increase could push them into financial difficulty.
These pressures are reflected in arrears, with 29% of agents reporting increases and 42% of landlords noting the same.
Implications for agencies
Revenue is also at risk. Renewals currently account for 27% of agency revenue on average, rising to 37% in London. The end of fixed-term tenancies under the Renters’ Rights Bill will force agencies to reassess income models to compensate.
To improve efficiency, nearly half of agencies (47%) are experimenting with AI, though only 22% report using it in daily operations and just 7% say it has significantly improved workflows or client experiences.
Amid these pressures, only 13% of landlords describe themselves as optimistic about the sector. Agents are somewhat more positive, with 20% “somewhat optimistic” and 7% very optimistic—a 4% increase in positive sentiment compared with last year.
William Reeve, CEO of Goodlord, comments, “This year’s report, now in its 8th year and our most in-depth to date, reveals a market under intense and mounting pressure. Landlords are deeply disillusioned, with the Renters’ Rights Bill hastening their decision to exit the market. And agents are facing tough headwinds and escalating pressure on their bottom line, making finding new revenue streams and routes to efficiency an absolute imperative."
“One of the most worrying areas is tenants. Already struggling with rental costs and a shortage of properties, we believe that the Renters’ Rights Bill could unwittingly ramp up the pressures they’re facing. From blocking tenants from paying in advance, incentivising landlords to overprice properties, and driving more to sell up, a bill designed to protect tenants could inadvertently be about to pull the rug out from under them. Renters’ Rights could very quickly become renters wronged.”
