The majority of private landlords would consider switching to a letting agency because of the current complexity of buy to let.
A survey of 2,000 landlords by comparative service USwitch says 63 per cent of landlords are open to make the transition - and one of the biggest reasons is because of agents’ knowledge of the sector.
And almost a third of landlords say agents’ capacity to manage repairs provides another reason to instruct a professional. USwitch says that on average, property maintenance is estimated to consume one-fifth of landlords’ income.
The most common reason landlords consider selling their property is a lack of profit (35 per cent) while another 31 per cent of landlords say repairs are a reason they would sell their homes entirely, the second most common reason given.
Another major reason landlords consider switching is to avoid the hassle of finding tenants (30 per cent) and to transfer legal responsibilities of a property (30 per cent), both of which may mitigate a landlord’s anxieties around the unstable buy-to-let market. Agencies are also more likely to accept tenants: 99 per cent of independent professionals had to reject a tenancy application at some point, while just 88 per cent of estate agents have done so.
Over a quarter of landlords (27 per cent) would switch to a letting agency to avoid scams and fraud.
False information and fraud in applications is the leading reason potential tenants are rejected, with over a third of landlords doing so at some point. Poor credit from applicants is another large factor causing tenancy rejection, as 33 per cent of landlords have turned down residents after checking their credit score.
USwitch spokesperson Kellie Steed says: “With both the Renters Reform Bill and higher interest rates on mortgages having a huge knock-on effect on the residential property investment market, some landlords may find the coming months more challenging than usual.
“While it can feel like selling up is the only option, there are other ways landlords can keep profits afloat during the cost of living crisis.
“Switching to a letting management company offers some attractive advantages, and gives landlords the scope to hold onto their investment. Property managers have a strong knowledge of the market’s changing regulations and can also take on much of the responsibility of owning investment property: lettings, repairs, rental disputes and complaints can all be tackled by an agency. Many offer increasingly alluring packages for landlords in return for around 10 to 20 per cent of profits.”