Letting agents could see their earnings shrink by more than a quarter once the Renters’ Rights Bill comes into force, according to new research.

Figures from Goodlord’s eighth annual State of the Lettings Industry report reveal that contract renewals currently make up 27% of typical agency income. The Bill’s proposed abolition of fixed-term tenancies would effectively eliminate this revenue stream.

Agents in London appear most exposed, with renewals accounting for 37% of their income.

“Sector under huge pressure”

Goodlord chief executive William Reeve warned that the private rented sector (PRS) is facing unprecedented strain:  “The sector is under huge pressure on all fronts – tenants, landlords and agents alike are feeling the strain, with more changes and uncertainty still to come.

This is a resilient sector that’s used to weathering storms, but the pressure seems to be increasing rather than abating.”

The report, based on a survey of 2,750 letting agents, landlords and tenants, is the largest of its kind. It will be formally published on 7 October.

Most agents unprepared

Despite the legislation being just weeks from Royal Assent, the majority of agents admit they are not ready.

• Sole operators: only 4% say they are “very prepared”
• Agencies with 2–10 staff: around a quarter feel ready
• Larger firms (11+ staff): less than half (47%) report adequate preparations

Goodlord warns that smaller agencies are particularly vulnerable.

Shifting strategies

To cope with the looming changes, many agencies are revising their business models:

• 70% are prioritising landlord acquisition
• 61% are exploring alternative revenue sources
• 39% are targeting higher management fees

However, just 19% plan to expand their workforce in the next 12 months, suggesting that growth ambitions remain cautious.

EPC standards add to concerns

Alongside tenancy reform, agents and landlords are also grappling with proposed EPC Band C standards.

• 63% of landlords view the requirement negatively
• 45% would spend no more than £2,000 per property on upgrades
• Only 19% would spend over £5,000 – far short of the £15,000 cap under consultation

With compliance required by 2028, 39% of landlords said they would prefer to sell their properties rather than fund the necessary improvements.

Outlook

Between the Renters’ Rights Bill and tightening EPC requirements, both landlords and letting agents face a difficult balancing act. For smaller operations in particular, survival may depend on finding new revenue streams – and fast.