Spicerhaart says it has seen a significant increase in acquisition enquiries from independent letting agencies, owing in part to the impact that the Renters’ Rights Bill is set to have on the industry when it comes into play later this year.
The legislation, set to be the most significant overhaul of housing law in over 30 years, is expected to fundamentally reshape the private rented sector.
Key reforms still expected include the introduction of the Decent Homes Standard, stricter enforcement measures with increased penalties, new eviction restrictions, and extended tenant protections.
However, proposed amendments to the legislation could delay the abolition of Section 21 ‘no-fault’ evictions until a review of county court capacity is completed – with further amendments suggesting fixed-term tenancies could remain, alongside inflation-linked rent increases.
Joel Osbourne, Spicerhaart’s new acquisitions director, said: “Many smaller agencies simply won’t have the resources to manage the operational, legal, and financial implications of such a significant change in legislation – even if the Section 21 ban is postponed.
“A recurring concern in my conversations with business owners is that uncertainty surrounding the bill – particularly over eviction processes and rent controls – could still trigger an exodus of landlords, significantly reducing their revenue streams.
“For smaller agencies, this could be devastating, as they lack the financial reserves, diverse portfolios, and operational capacity that help larger agencies weather market changes.”
Spicerharrt points to the government’s own impact assessment estimates that the bill will cost letting agencies £391.7m over the next decade, largely due to landlords leaving the market.
This is further supported by data from the National Residential Landlords Association, which found that 41% of landlords plan to reduce their rental portfolios in the next year, compared to just 5% who intend to expand.
With landlords increasingly looking to reduce their portfolios or leave the market altogether, many letting agencies face an unavoidable revenue squeeze, according to Osbourne.
He believes that for smaller agencies already operating on diminished profit margins, this could be the tipping point that forces them to sell or consolidate.
He explained: “The financial pressure is mounting, and for many independent agencies already operating on tight margins, these changes present real challenges. With landlords reassessing their portfolios, agency owners are having to think carefully about their next steps.
“I’ve only been in post for just over a month, but my phone is constantly ringing, and my diary is rapidly filling up – a clear sign that business owners are proactively exploring their options.”
