Phil Spencer urges letting agents to go on the offensive

I was surprised the other day to read statistics from the English Housing Survey about how many landlords use letting agents.

In the EHS data released a year ago (and it’s the most recent survey to ask these questions) 49 per cent of landlords said they did not use an agent; around 46 per cent regularly used an agent. The remaining five per cent used an agent on an ad hoc basis. 

So there’s clearly a big pool of landlords still to be won over - and, possibly more worrying, there’s a feeling abroad that some of the landlords who currently use agents may reverse their decision in a bid to save money as the rental screws tighten. 

You and I both know that not using an agent is a false economy, but I wonder if this is the time for agents with lettings divisions to go on the offensive - in a positive way - both to retain existing landlord clients and win new ones? 

From my recent discussions on Move iQ’s podcasts with people like Vanessa Warwick of Propertytribes and Timothy Douglas of Propertymark, I think there are several arguments that letting agents can put forward.

A Blizzard of Regulation

Back in the summer of 2021 the National Residential Landlords Association estimated that over the previous decade there had been a 40 per cent rise in the number of laws applying to the private rental sector, taking the total up to 168 different pieces of legislation. 

On top of that there are local regulations exercised though councils. 

The PropTech firm Kamma, which monitors council activities, says 52 landlord licensing schemes and consultations were launched in 2022. This is five more than the previous year, and almost 10 more than in 2020, highlighting what Kamma calls “the growing trend of yet more regulation targeting the Private Rented Sector”.

And the fines handed out to rogue landlords and letting agents averaged £90,000 per month in 2022. 

If you think that’s an eye-watering volume of legislation and regulation for a typical amateur landlord to master, you’re right - and there’s more to come.

Renters Reform Bill 

Whatever the rights and wrongs of this Bill - and I know many in the agency industry think it’s a heavy-handed approach that favours tenants - it promises new legislation and new challenges for landlords.

As we all know there will be substantial changes to eviction powers under Section 8 and Section 21 of the Housing Act 1988. But on top of that there will be new rules surrounding pets in lets (with an exception on the Tenant Fees Ban to allow renters to pay insurance), plus what promises to be a complex Decent Homes Standard to which private rental accommodation must conform.

Then there is a mandatory register for landlords and an Ombudsman scheme - details to be announced - which landlords will be legally obliged to join. 

Let’s be realistic. How many typical landlords with just one or two properties and who entered buy to let as an investment rather than a full time job, will really get across all of these changes? 

It’s a potential recipe for disaster for the amateur landlord, especially as the Bill pledges beefed up enforcement by local councils and the prospect of more and higher fines for those who break the rules by accident or design.

Everyday Help for Landlords  

In addition, there are all the other services you do for landlords every working day - ones which you may almost certainly do automatically, without necessarily stopping to think just how huge a help they are to your landlord clients.

There’s finding and vetting tenants; there’s the check-in process at which specific documentation needs to be handed over and, often, detailed inventories undertaken, in addition to a deposit being taken and secured in line with legal requirements; next up comes rent collection; and possibly there’s full management covering all the health and safety checks, EPC inspections and management; and finally there’s check out - the final inventory reconciliation, return of deposits or part-deposits, and handling any outstanding issues or disputes.

It’s worth reminding your landlord clients that these are just the everyday responsibilities you take care of along the path of any and every tenancy. In addition to all this, you handle the unexpected - the leaks, break-ins, emotional calls from stressed tenants, and so on and so forth. 

How To Get The Message Across

Every letting agent reading this will know all this…but I wonder how many somehow actually present this list of activities to landlords, to ensure they appreciate just how good a service they get for their percentage fee? 

There are some tried and tested methods. For example, local newspapers with property supplements are normally receptive to well-written articles which are ‘oven ready’ and authoritative rather than just a plug for an agency. There’s social media too, of course.  

And I know a few enterprising agents hold free seminars or online webinars - sometimes run with a local council explaining its landlord licensing schemes. That’s a positive way to put across the complexity and importance of the changing regulatory landscape.

If you have a moment this summer it might be worth considering how best to get the message across that buy to let remains a good long-term investment, despite the recent taxes and interest rate rises. 

But to undertake it legally, with the least anxiety and the most security, it makes sense to use professional Propertymark-approved lettings agents.

And if all else fails, perhaps remind reluctant landlords that despite all the changes imposed by government, the costs of using an agent remain tax-deductible! 

* Phil Spencer is a presenter, author, businessman and property investor. Phil’s consumer advice platform Move iQ, is a website, YouTube channel and podcast. Each preserve and reflect the same impartiality that consumers trust and base their property moving plans.