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TODAY'S OTHER NEWS

Revealed - why some landlords do not use letting agents

Light has been shed at last on the long-running uncertainty about why some landlords choose to use lettings agents and some do not.

A survey for Letting Agent Today and Landlord Today, run by industry supplier Hamilton Fraser, received enthusiastic response from both sectors and gives greater understanding than before about the link between the two.

The survey - conducted on Twitter - asked three questions and in each case attracted a significant response:

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1. As a landlord, do you use a letting agent currently? (2,217 votes) 

- Yes, fully managed - 27.3%

- Sometimes - 15.2%

- No - 48.3%

- Considering doing so - 9.2%

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2. If you are likely to use a letting agent in the next 12 months, or if you currently use one, what is the main reason?  (1,337 votes)

- More COVID-19 measures - 26.9%

- Increased Private Rental Sector legislation - 18.5%

- Lack of time - 35.7%

- Distance from property - 19%

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3. As a result of the pandemic, are you more or less likely to use a letting agent in the next 12 months? (2,506 votes)

- More likely - 16.8%

- Less likely - 56.7%

- Undecided - 26.6%

“Over the past few years the changes to legislation have placed more and more financial burden onto landlords. For example, the tenant fee ban has meant that where letting agents traditionally and legitimately charged tenants for certain services creating tenancies, the new law has prevented them doing so” explains Eddie Hooker, chief executive of Hamilton Fraser, the parent company operating Total Landlord Insurance, mydeposits, Client Money Protect and other products.

“This unfortunately means that the landlord has to foot the bill. Add to this that the changes in taxation for landlords’ earnings from rental properties for many landlords is being squeezed. To save money landlords are increasingly trying to self manage, thus reducing their use of agents” he adds.

“Is not using a traditional agent a false economy?  Like in many industries there is an increasing shift to online trading and information is more available now than ever before.  Letting agents must up their game and prove value to their customers, which ultimately is the landlord” continues Hooker.

“Agents need to be transparent with their fees, provide the financial protection to their customers and ensure that they are well educated in the business of lettings. There are some very good agents and these are worth their weight in gold. But unfortunately there are also some very poor agents who hit the headlines, tarnishing the reputation of the entire industry.” 

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    I use an agent I trust to find me tenants BUT the management of the tenancies I handle myself. In many cases my tenants recommend friends who are looking for accommodation (almost an informal reference in a way) which saves me even having to pay agents fees. I have a great independent maintenance guy who can sort out everything with the properties so It's had for me to see the benefit of using an agency and paying 10-12% monthly fees to them. I don't want to say that letting agents are a bad thing in general but I have had some terrible experiences with a few over the years that has left me wary. They do an important job but when you only have a small portfolio of BTL properties to manage, for me at least I would rather manage and relate to the tenants directly.

  • James B

    Good agents are worth their money imo.. I wouldn’t want the legislation responsibility or tenants contacting me direct on a Sunday to say they have a leak when no plumbers answer the phone

  • Roger  Mellie

    Penny pinching DIY landlords in my experience usually come out financially worse off over the long run. Less rent, more outgoings and susceptible to taking on poorly qualified tenants.

  • jeremy clarke

    Last year I had a landlord who came to me to find tenants as his tenants of 7 years were moving on. In all that time he had never visited the property, in all that time he had not reviewed the rent, in all that time he had not spoken with his tenants.
    When I visited the house, the tenants had "decorated" made alterations including adding electrical sockets themselves, they had replaced carpets and intended to take the new carpets with them. They were paying £900 for a 3 bedroom house, in the same road we let a house 4 years ago at £1100 pcm and with annual reviews the tenants are now paying £1375 pcm.
    The landlord cited our fees as being the reason that he didn't use an agent yet we would have communicated issues with decor and carpets, we would have visited the property and discussed anything with all parties, the fact that rents were not reviewed during the whole term probably meant that the landlord missed out on at least £2000 each years 2 & 3, £3000 in years 4 & 5 in lost rent and for the past 2 years maybe c£5000 pa making a total of c£20,000 in lost rents! Over that period our fees would have accounted for less than half of that figure meaning a landlord has lost out by over £10000!
    The landlord spent £9,000 putting the house in order, we now manage that property! It will get annual reviews, visits once Covid permits and we will protect his investment.

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    • 12 October 2020 11:42 AM

    Yeah but clearly this LL was an idiot.
    S13 are very easy to issue.
    I do one annually.

    Not to visit is barmy.
    Being lazy is not what you should be if you are seeking to maximise your income from rental property assets.

    I make sure I am what they call a greedy LL.
    I call myself an effective business man by ensuring I maximise my income wherever possible.

    That is the ONLY reason I became a LL.
    This LL wasn't very good at business.
    For competent LL LA are an unnecessary expense

     
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    I'm afraid I'm with Paul Barrett on this one. Maintaining a relationship with your tenants is simply good business. No business can thrive unless they cultivate a good ongoing relationship with their customers which, after all, is what your tenants are. If you don't then you get what you deserve sadly.

    If Letting Agents don't start evolving - especially in the face of the new proptech out there - then they will end up going the same way as high street travel agents and become a thing of the past.

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