State of
the Lettings
Industry Report 

This year’s survey captured responses from 350+ letting agents across the UK, with the largest share of respondents based in Greater London (24%), the South East (18%), and the South West (18%). Agencies varied in size, but the average firm manages 340 properties and employs 14 people. Just over half (54%) have five or fewer staff, while only 4% employ more than 100.

The respondent pool skewed senior: two-thirds of agents were either managing directors or department heads, with property managers and negotiators also represented. On average, respondents had 13.5 years of experience in the sector. Reflecting this seniority, the average annual salary of £48,000 was 20% higher than seen in last year’s survey, with nearly 1 in 10 (9%) earning more than £100,000.

More than 1,350 landlords took part in this year’s survey, with an average portfolio size of 7.4 properties. The majority of landlords are small-scale: 17% own just one property, and a further 45% own between two and five. At the other end of the spectrum, 9% manage portfolios of 20 or more, reflecting a smaller but significant cohort of professional landlords.

The use of letting agents is common, although not universal. Just over half of landlords (57%) currently use a letting agent to manage some or all of their properties, while 26% have done so in the past. Foreign landlords are the most likely to rely on agents (67%), compared to 42–65% in the UK, depending on region, with usage highest in London and the South East. The main advantages of using an agent cited by landlords include sourcing tenants, referencing, compliance, and day-to-day property management.

The nearly 1,000 respondents are spread across the UK, with the largest shares in the South East (22%), London (17%), and the South West (14%). Smaller proportions are based in the North West (12%), North East (10%), East Midlands (9%), West Midlands (9%), and Scotland (4%). Most are British (70%), while 30% are non-British, typically with leave-to-remain status, with an average age of 37.5.  

Employment amongst this year’s respondents is high: 72% work full-time, 6% part-time, and 7% are self-employed. Living arrangements are varied, but tenants are most likely to live with a partner (34%) or alone (30%).

Figures from the ONS show that rental supply remains around 20% lower than it was before the pandemic – yet demand has surged by 60% over the same period. 

Two-thirds of letting agents (67%) reported an increase in tenant demand this year, and nearly half described that rise as significant. At the same time, 30% of agents said the number of properties available to rent had declined, with 14% citing a “significant decline”. 

Lettings is increasingly competitive, with 48% of tenants saying they found it difficult to find a property. Many tenants are also going to unusual lengths to secure a tenancy — two in five renters say they’ve paid more than the standard month’s rent up front, with 42% citing the reason as simply trying to beat the competition.

Almost half (42%) of tenants are in ‘rent poverty’, which we define as spending 40% or more of their gross income on rent, a slight decrease from 48% last year. For tenants on the lowest salaries, the situation is even more acute. Among those earning under £20,000 a year, nearly three-quarters (73%) are spending more than 40% of their income on rent. A third of tenants say a 3% rent increase would push them into financial distress. 

In this context, it’s unsurprising that support for rent controls – which have been proposed as a way to rein in rising costs – remains high among tenants. A majority of tenants (59%) said they “strongly agreed” with introducing rent controls, with a further 21% saying they “slightly agreed”. With affordability under sustained pressure, it’s clear many renters see regulation as a necessary intervention.

Many tenants are in a precarious financial position. More than a third of tenants (37%) report having no savings or investments to fall back on. Among those who do, the average amount saved is £5,200 – a figure that’s slightly higher among tenants aged 50 and over. Nearly six in ten tenants report having no personal debts, but among those who do carry debt, the average amount owed is £1,528. 

The increasing cost of rent is also prompting increased mobility. Just over 30% of tenants reported moving in the past year to find more affordable accommodation. Scottish tenants and Londoners were the most likely to relocate in search of savings.

Tenants who have moved to find cheaper rent relocated an average distance of 18 miles.

Landlords with 20 or more properties were the most likely to report reducing their portfolio – 35% said they’d sold in the past year, and another 15% are trying to do so. Mid-sized landlords are also scaling back. Among those with 6-10 properties, a quarter (25%) had sold at least one, and 17% were planning to.

Landlords looking to expand their portfolios are in the minority, with only 10% increasing their holdings in the past 12 months, and a further 4% attempting to do so. Landlords with 11–20 properties are the most focused on growth, with 50% increasing their portfolios in the last year. Growth among smaller landlords is limited – only 7% of those with 2–5 properties expanded their portfolios. 

Four out of five landlords who are reducing their portfolios cited the Renters’ Rights Bill as a key reason for doing so. The Bill’s proposed changes, including the abolition of Section 21 and new restrictions on rent setting, have added to a growing sense of uncertainty.

Landlords who are selling up described “increased time and hassle involved in renting property,” and “general complications and costs of being a small landlord” as key reasons for leaving the PRS. Some said they were finding it difficult to keep up with the paperwork or worried about unintentional non-compliance: “It’s difficult to comply with certainty,” said one. “I just don’t want the hassle of starting over in such a highly legislative environment in case I accidentally do something wrong,” said another.

In 2025, 80% of landlords said the abolition of Section 21 would have a negative impact on the PRS – up from 77% in 2024 – as it will make it more difficult for landlords to regain possession of their properties without dealing with the courts. Opposition is especially strong among larger landlords: 86% of those with 20+ properties are negative, compared to 75% of single-property landlords. 

Agents and landlords have mixed views on other elements of the Renters’ Rights Bill. Some measures are welcomed: 47% of respondents said applying the Decent Homes Standard to the PRS would have a positive impact – up from 42% in 2024.  Most landlords are already compliant with the Decent Homes Standard – 76% say all their properties meet this standard, and a further 15% say 80% or more of their portfolio does. Secondary legislation will decide what makes a “decent home". 

Neither agents nor landlords are happy about the new rules on pets in lets, with only 8% backing the move. Unsurprisingly, tenants feel differently. Almost a fifth (19%) said they would get a pet once the law comes into effect, and a further 32% would consider it. 

As Royal Assent approaches, preparedness for the Renters’ Rights Bill is dependent on the scale of the operation. Sole operators are the least ready, with just 4% describing themselves as “very prepared”. About a quarter (23-27%) of agencies with 2-10 staff members felt prepared for the changes, while 47% of agencies with 11 or more staff members felt “very prepared” for the changes. 

Landlords, however, are unconvinced of letting agents’ ability to navigate the changes. When asked how confident they were that their letting agents could cope with future legislative changes, including the Renters’ Rights Bill, the average rating was just 3 out of 5 – showing letting agents have some work to do when it comes to demonstrating their legislative expertise to landlords.

Energy efficiency rules continue to concern landlords, with 63% viewing the proposed EPC Band C target negatively, mainly due to cost.

While most landlords support higher standards, many are unwilling or unable to meet the required investment. Nearly half (45%) say they’d spend no more than £2,000 per property, and only 19% would go above £5,000 — far below the estimated £6,500 average upgrade cost, and well short of the proposed £15,000 cap. Some funding is available through existing schemes, but awareness and access remain limited.

With a 2028 deadline for compliance – and 39% of landlords saying they’d rather sell than invest – many properties risk exiting the PRS altogether, further straining rental supply.

Regulatory and legislative compliance is something that agencies take increasingly seriously. For example, while around 1 in 10 (7.7%) remain at risk of Right to Rent compliance breaches, over nine out of ten (92.3%) complete these checks. Failure to comply with this legislation leaves agencies at risk of up to £10,000 fines for first offences and £20,000 for repeat offences per occupier.

The picture is less rosy elsewhere.

Sanctions checks became mandatory on May 14 2025, yet over a quarter (27.6%) of larger agencies still don't perform tenant PEPs and sanctions checks. The risk of non-compliance is significant, with seven-figure fines and criminal prosecution possible.

Small agencies (1–5 staff) consistently report higher uptake across all four services, notably for PEPs and sanctions checks (84.5% vs 72.4% in larger agencies) and Companies House checks (73.3% vs 66.3%). AML checks are the most evenly adopted service, with nearly identical uptake between small and large agencies (around 80%).

1 in 5 agents (20%) described themselves as “somewhat optimistic” about the future of the sector, with a further 7% saying they were very optimistic. Together, that represents a 4% increase in positive sentiment on 2024. 

At the other end of the spectrum, there was a 6% drop in the number of agents describing themselves as “very pessimistic” about the future of the sector – though pessimism remains widespread. A third (34%) of agents said they were “somewhat pessimistic” about the future of the PRS, and 14% “very pessimistic”.

The longer-term data shows how dramatic the shift in mood has been since the pandemic years. In 2020, 80% of agents reported feeling optimistic about the sector’s future – despite the challenges of Covid-19. 

Landlords, however, continue to take a more negative view. Only 13% described themselves as optimistic about the sector in 2025, compared to more than half who identified as pessimistic. With ongoing regulatory pressure, rising arrears, and costs weighing heavily, landlord sentiment shows little sign of improving in the 
near term.

Operating costs continue to climb for the lettings industry, with 91% of agents reporting increases over the past year. For larger agencies, the squeeze is universal – every business with 26 or more staff members said their costs had increased. Smaller operators, by contrast, were less likely to flag labour costs as a concern, reflecting the more limited scale of their operations.

When asked what is driving these rises, supplier costs came out on top, cited by nearly a third (30%) of agents. Wage and National Insurance-related increases also play a significant role, particularly for mid- and large-sized agencies, where up to three-quarters pointed to staffing costs as a key pressure.

Against a backdrop of landlords leaving the sector and rising operating costs, agents’ top priority for the year ahead is clear: winning new landlords. 7 in 10 agents (70%) cited this as a focus area, alongside finding new ways to generate revenue (61%)  and achieving higher management fees (39%). 

Over half of agents (52%) said improving compliance was a priority. At the same time, 44% are focused on reducing administrative time – much of which is spent managing compliance. Only 19% of agencies had plans to grow their team in the coming year.

The prospect of new regulation under the Regulation of Property Agents (RoPA) framework continues to divide opinion in the industry. Labour has indicated its support for measures including mandatory qualifications – with all agents required to hold at least an A-level and agency owners expected to have a degree-level qualification.

This year’s survey shows stronger views on the two big potential impacts of regulation: higher standards and higher costs. Over half of agents (55%) said standards would rise if RoPA was implemented, up from 47% last year. A similar share (56%) expect fees to increase, compared with 43% in 2024. A third of respondents (30%) believe industry pay levels would also rise, while nearly three in ten (29%) expect more landlords would use letting agents as a result of greater professionalism.

Almost a quarter of agents (24%) expect their agency to end up employing fewer people as a result of the requirements, and 9% said they would leave the industry altogether if RoPA became law. Smaller agencies remain the most vulnerable: 16% of those managing fewer than 100 properties said they would sell up, compared to less than 10% among larger operators.

The intentions of the Renters’ Rights Bill are clearly well-meaning. However, as this report reveals, there is much more to the government’s proposed reforms than meets the eye. 

The data now confirms that repeated warnings about unintended consequences were reasonable. The abolition of fixed-term tenancies poses an existential threat to the agency revenue model. Court backlogs are a near certainty, making the eviction process longer and harder for landlords. And tenants will have to contend with even higher asking rents, which could push affordability to breaking point. 

But the purpose of this report isn’t to say “we told you so”. The legislation won’t change fundamentally before it becomes law, and English agents, landlords, and tenants alike must adapt to the new landscape, just as their Scottish counterparts have. 

What is clear is that all of the key stakeholders in the PRS need help. Supply is shrinking as more landlords leave the market, and most tenants don’t plan to become homeowners any time soon.

Unless the government responds with increased housing supply, a modernised court system, and incentives for investors to both enter and remain in the PRS, the picture cannot improve.