Rushbrook & Rathbone has said the property management sector is expected to see further growth as landlords respond to increasing regulatory pressures under the Renters’ Rights Act.
Analysis by Rushbrook & Rathbone of the latest VAT and PAYE enterprise data found there are now an estimated 20,105 property management businesses operating across the UK, up 2.8% annually from 19,550 the previous year.
England accounts for 91.1% of firms operating across the sector, while London remains the largest regional hub, home to around 6,200 businesses and accounting for 30.8% of all firms.
The South East ranks second, representing 13.8% of businesses, followed by the North West at 9.7% and the East of England at 9.1%.
The analysis also found that the East Midlands recorded the strongest annual growth in operational businesses at 7.9%, followed by Wales at 5.5%, the West Midlands at 4.0% and London at 3.7%.
However, the data highlighted the fragmented nature of the sector, with 80.9% of all property management businesses employing between zero and four members of staff.
Just 0.9% employ 50 people or more.
More than 72% of firms also report annual turnover below £250,000.
Roma Sharma, managing director of Rushbrook & Rathbone, said: “The continued growth of the property management sector is ultimately a positive sign and reflects the increasing complexity of operating within the private rented sector.
“As landlords face greater regulatory requirements, more compliance obligations and increasing pressure around tenant management, maintenance and administration, many are recognising the value of professional management support.
“However, the sector also remains highly fragmented, with the vast majority of firms operating on a very small scale. Whilst there are many excellent independent operators within the market, increasing regulation and operational complexity will inevitably place greater pressure on systems, processes and resources.”
Sharma added: “The introduction of the Renters’ Rights Act is only likely to accelerate this trend, particularly as compliance expectations continue to evolve.
“For established firms, the challenge is not only to maintain high standards of service, but to continue adapting alongside the changing needs of landlords, tenants and the wider regulatory environment.
“Over the past three decades, we’ve seen the sector evolve significantly, but the importance of experience, consistency and professionalism has remained constant throughout.”