Under-pressure landlords now more choosy about letting agents

A prominent figure in the London property world says landlords under increasing financial pressure are being more selective about the letting and managing agents they choose.

Jo Eccles, founder and managing director of Eccord - which manages £1.5 billion of residential property in prime central London for portfolio and individual landlords - says: “For landlords who are able and committed to remaining in the market long term, we are seeing them review their existing arrangements. Many are choosing to move away from underperforming letting agents or property managers with high staff turnover, as they recognise the importance of tenant experience now more than ever, if they’re to achieve high rent increases.”

Eccles says highly leveraged landlords are coming under serious cost pressures as fixed rate mortgage deals come to an end, and claims that stress testing by lenders means some landlords are finding they can borrow 30 per cent less than before, forcing them to make up the shortfall or sell.

“Those with the financial flexibility are reorganising their finances to pay down debt and raising rents by an average of 15 per cent at renewal, but it isn’t always enough to meet their increased borrowing and service charge costs – which are up 30 per cent in some buildings” she notes.

Eccles knows of one landlord in a prime property who has seen his mortgage repayments more than double from £4,000 a month to £9,000 a month - and he can’t sell due to cladding issues. 

She says: “We’ve secured him a significant rent increase of 19 per cent but he has still swung from a monthly surplus to a £2,000 shortfall, which he’s having to personally top up each month. This illustrates that the challenges landlords are facing can’t always be resolved with rent increases alone.

“Some landlords who were investing for the long term now have no choice but to exit the market. This will further diminish supply and cause more hardship for tenants who are already struggling to find high quality rental, professionally managed homes in London at reasonable prices.”