Letting Agents Under Pressure as New Listings Decline

According to Plimsoll’s latest analysis of the UK’s 2,000 leading letting agents, the market is beginning to show signs of fatigue after years of steady expansion. As RICS reports the sharpest fall in new rental listings since the pandemic, Plimsoll’s comprehensive data shows a market that has reached an inflection point.

Plimsoll’s assessment reveals a mixed picture: while just under half of companies are still seeing sales growth, the rest are already in decline. Only a fraction of around 2% are posting exceptional growth of more than 10%, suggesting the standout performers are increasingly rare. With average sales growth across the market holding at 5.3%, the pace of expansion is clearly slowing.

This latest assessment by Plimsoll also flags a worrying drop in profitability. The average margin across the industry has dipped to just 1%, with a growing number of companies reporting losses for a second consecutive year. Plimsoll’s ratings system now classifies nearly one in three firms as being in financial difficulty, with many cutting margins in an attempt to stay competitive.

Valuations tell a similar story. Despite average values rising by more than 3% in the past year, these gains mask deeper volatility beneath the surface. While a strong minority have increased in value, a sizeable proportion of around one in ten have lost a quarter or more of their value. In a consolidating market, that creates opportunity. According to Plimsoll, over a fifth of companies are now rated as highly attractive acquisition targets, with most concentrated among the sub-£5m turnover bracket.

Plimsoll’s analysis paints a picture of a sector that is splitting in two: established, well-capitalised players continue to perform, while a growing number of firms face falling sales, declining margins and valuation pressure. With fewer new instructions entering the market, the pressure is mounting - only those with the financial strength to adapt will emerge stronger.

To explore how your business compares against the industry leaders, visit www.plimsoll.co.uk today.