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TODAY'S OTHER NEWS

Too dear, not transparent - landlords say why they don’t use agents

A new study of over 2,000 landlords reveals that only a quarter of them instruct agents to fully manage their investment properties - and just another 15 per cent use agents on an occasional basis.

The survey - for Landlord Today and Letting Agent Today - was conducted on Twitter by industry supplier Hamilton Fraser, the parent company operating Total Landlord Insurance, mydeposits, Client Money Protect and other products.

Underlying the low proportion of landlords using agents is cost, especially since the fees which now cannot be applied to tenants being shifted to owners instead.

Eddie Hooker, chief executive of Hamilton Fraser, says it’s now up to the agency industry to show its worth to landlords.

“Letting agents must up their game and prove value to their customers, which ultimately is the landlord.  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” explains Hooker.   

“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.  The skill is in selecting the good agent!” he adds.

Hooker’s advice to landlords is that they should interview agents as they would any other service, and if they choose to self-manage instead they should join a landlord association.

The survey shows: 

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%

“Technology and access to information is also affecting landlords’ use of agents” adds Hooker.  

“Letting platforms with fixed fees and self-selecting services are more commonplace now than say, five years ago. They have matured and are far more transparent than ever. There is more choice when it comes to listings and the internet provides more information than ever.  

“Traditional high street lettings unfortunately are suffering from increasing costs which has to be passed onto someone, which in most cases is the landlord.”

Hamilton Fraser’s guide to landlords selecting letting agents can be found here.

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    • 12 October 2020 07:03 AM

    My letting agent is absolutely fantastic. Well worth their fee and gives me that reassurance that my investment is being well looked after. I suppose it all comes down to your situation. I work a full time job hundreds of miles away from my property and sometimes abroad. I need someone trustworthy to manage my properties. Best part is as they are offering a professional service I can simply put it on my tax return. So what is the true cost? I pay it to someone who looks after my property or I pay it to the tax man who does nothing?

  • Paul Barrett

    No LL should use a LA if they are at least an hour drive away.

    Beyond that a LA could be justified.

    But LA can seriously damage your wealth.

    Only use them if you really can't cope yourself.
    A LL personally involved will always give a better service to the tenants.



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    Morning Paul. I read your article with interest and with over 30 years experience as a landlord and 14 years owning/running a highly successful triple award winning, professional letting agency.

    I agree in part with your comments but in truth “some landlords” shouldn’t even be allowed to own any property. In many cases they will bleed you for information, go off and try to manage it themselves and when things get messy come back and ask you to manage it.

    In addition many don’t keep up to date with current legislation and compliance and often have tenants in their properties with out of date certification and sometimes with an incorrect lease downloaded from the internet.

    This is not about how far you stay from your properties, we had let only landlords abroad who managed their portfolios very well, whilst others were far from that.

    It’s all about being extremely professional, knowing what’s involved and building relationships. We found in some cases landlords didn’t want anywhere near their tenants.

    Professional staff, training and proper management, costs money.

    An agent is sometimes the best investment you can make.

     
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    Wish I could do without them. My problem is I live abroad, so I have little choice. So immediately, they take 10% of rental income and then bung VAT on top of that! Not to mention fees for ECP and all the other nonsenses. Ho Hum - What to do?


     
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    I also have a very good independent local agent who I have used for more than 20 yrs now, money goes into my bank account the same day that they receive it.

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    Bizarre photo to place inside this article. Bearded man in shorts with coffee smiling ridiculously. What is he seeing on his computer screen? Definitely not the results of that survey. (Can you operate a computer using just one hand with a cup in the other? Maybe just about.) The nation demands answers.

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    haha! thanks for making me smile on a Monday morning!

     
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    Technology / internet forcing LL's to use Agents as we haven't a hope of dealing with what we have always dealt with for decades , now it's all taken away from us and put in a different format that they know we cannot do, you can bring the horse to the water but you can't make him drink, it all absolute rubbish just for Digital LL's that only come to the business this last 15 / 20 years after we giving years campaigning for 1988 Act, then they hijacked the Office end of the business to our exclusion, not proper LL for the most part. The main reason I try to avoid agents is the 9% + vat (10.8%) now that's the reason simply, last time they took the first months Rent completely + I had to put my hand in my pocket as well for another £400.00 as the months rent wasn't enough to to cover the charges, put that in your pipe & smoke it.

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    Time you changed your agent! We charged £150 + vat take on/setting up fee and 10% pm Thats no where near a full montyhs rent Michael

     
  • Paul Barrett

    I think about time compulsory CPD training for LL and formal training and qualifications for LA.

    When IFA had to be qualified 90 % gave up leaving behind a cadre of well qualified and knowledgeable practicioners.

    This could happen with LL and LA which I consider would be no bad thing.

    It is perfectly reasonable for tenants to expect that those dealing with them have a modicum of training and qualifications.

    I support the concept of LL CPD training.
    It should emulate that of the road transport industry.

    Every driver now has to have carried out the CPD training before they can earn money driving for a living.

    They have to do this every 5 years.
    This is an EU thing which ordinarily I would condemn but this is one thing the EU got right.
    Every EU vocational driver has to complete 35 hrs of CPD training every 5 years.

    From the perspective of Govts it at least keeps the workforce reasonably up to date with things.

    LL should be no different.
    I contend that many new LL wouldn't even bother becoming so once they realise what it all entails!!





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    Alister, where are you coming from 10% pm is more than a months annual Rent then + your £150 are you winding up.
    Paul, I have the CPD points that cost me Hundreds of £'s I was no better off in the end only poorer.
    I have put over 2000 Tenants through my hands personally without all this crap, now I need to learn how to do it, its now all button pusher , red taps and bull sugar nothing to do with quality affordable housing, just keep making rules and change the format how everything is done to make themselves seem important.

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    Alister, for good measure it goes without saying your fees attracts 20% vat / several hundreds of £'s.
    have a nice day.

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    I stopped using Agents many Years ago, they were useless,.
    If there was a problem at the Property they would just send a Contractor without questioning whether it was the Tenants responsibility or could be resolved simply by the Tenant. They also caused ill feeling between the Landlord and Tenant, and since I have run all my Tenancies myself, I have great relationships with my Tenants.
    Agents are an expensive non- effective extravagance.

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    Also, LA contractors tend to charge way, way over the top to cover the commission they have to pay to the LA to stay on their preferred suppliers.

  • English Landlord

    I use a Lettings Agent who also acts as my Sourcer and overall Property Manager 24/7 complete with Power Team. I can't be bothered with headaches. I only want property as an investment and not a Job strategy.

    Paul Barrett

    Using a LA is a headache.
    Far fewer headaches with self-management.

     
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    English Landlord, Congratulations I didn't know there was one, I am delighted to hear. Cheers

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