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.”
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😂😂👎🏻👎🏻 not a cat 🐈⬛ in hell’s 👺 chance….. the agents I have dealt with have been at best… mediocre, and that is just buying and selling properties, they don’t have any “ skin” in the game, we do. No chance.
If you live overseas as I do, you have no choice but to use an agent.
William, I live in Spain and manage my portfolio pretty well. The key is to build good contacts and a have at least two of each tradesmen you can call on. The internet makes management quite doable.
I see little need to use an agent with the exception of a tenant find service which works well for me. I have experience of agents getting the paperwork wrong which causes really difficult problems given the completely pedantic court system and all associated tripwires. Consequently I only approve tenancies when I have seen ALL the paperwork.
In my experience Letting agents can be ok or very poor. The mark up they put on all works including, EPC, EICR, PAT, Legionella testing and general repairs is basically day light robbery. Example, My agent charges £100 to arrange a Legionella test, which I can get privately for £50 and it’s the same company who carry out the testing. I know they need to make money too, but ripping off your customers is wrong in my eyes.
Please don't tar every letting agent with the same brush - some of us have high standards and we believe in providing a service. We don't charge the contractor a 10% fee for giving them work - we charge the landlord the exact price the contractor charges us - no hike! they get the actual invoice, as a result we have great contractors and happy landlords. We provide a professional service and treat every house as if we owned it - yes we are the exception but if you look you will find exceptional letting agents out there. The problem is many landlords don't both looking and do not bother talking to independent agents - they can't be bothered to move so continue to validate the agents that do rip landlords off. And those agents are making money from marking up all the hidden "extras" they reduce their headline fee - the landlord doesn't realise that they are actually paying more than if they switched to an independent agent.
I agree SS, on the odd occasion my agent instructs a tradesman on my behalf there are no add ons, I get the invoice direct and normally pay the tradesman direct, as I said earlier not all agents are the same.
Mine charges me 10% + VAT of the rent received and I think this is mostly covered by the increased rent they normally obtain for me
The article even admits agents accept tenants that individual landlords would reject.
In a seller's market I don't think I need an agent- maybe when I get a bit older and my facilities decline around 79?
My agent comes back to me with a list of tenants that they feel are acceptable, we then go through them one by one and I make my choice
It could be because some prospective tenants know they won't pass letting agents referencing criteria so they don't bother going to an agent.
About 20% of my tenants have failed standard referencing so wouldn't have been able to get a property via a letting agent.
There's a well known referencing that has a very light package my agent used. Instead of a financial advisor you wind up with UC claimants. I suspected this but it was hard to rent so chanced it.
Yes I think it is Jo, the no hopers don't apply and therefore don't waste our time
Andrew - interesting that you describe them as no hopers.
A couple of years ago I let a flat to a young professional couple who had failed referencing for £795 a month rent due to the 'wrong' type of job contract. 10 months later they were approved for a mortgage for a £325000 brand new house.
Jo there will always be the exception, as in your case that you've highlighted, there was a time that I took people on face value but not anymore, far too risky now
Jo
That's a good point about the wrong type of contract.
A junior doctor, initially employed directly by the NHS in a hospital, then as a trainee in a GP practice as an employee, then finally as a full partner in a GP practice tends to fail credit checks due to changing jobs too frequently!
Same for a new law graduate doing the final post graduate diploma year before becoming a trainee employed in a law firm and ultimately a partner.
I suspect most agents wouldn't take them on but most hands on landlords would look beyond the computer verdict.
🙀👎👎👎👎👎👎. No way. I managed one property myself. Used an agent to find the tenant and do the AST. But that’s it. All was fine. Then because of some weed smokers next door and potential complaints I thought I would try an agent.
The agent I chose (a well known chain) claim to be all ‘Heart’. But they certainly are not.
They didn’t do the deposit forms correctly and through incompetence took a holding deposit and used it for the balance of the first months rent. Crucially missing some pence in the deposit which resulted in ME (not the agent) contravening the tenant fee act. Both issued stopped me serving a S21. They refused several times to correct the deposit paperwork. They did in the end and of course not taking any responsibility for the new paperwork. They said they need to refund the bank card and don’t have the bank details. Luckily I have the tenants bank details and got my solicitor to refund the money. Otherwise I could not serve a S21. And be trapped with these infamous Nigerians I mention a lot!!!!
They quote £2,200+VAT to replace a kitchen floor in a 3 bed semi in outer London. £15k for a new roof to a kitchen, an extractor fan, paint a couple of bathroom ceilings. Everything is well over priced. Usually by several hundred %. YOU have to get your own builders to do the work and it’s much cheaper. You wind up doing everything. It’s more hard work with them as you have to check the statements they do, chase them to chase other people.
My tenant under a S21 atm. Gas inspection due. Instructed 4 weeks prior. Chased 2 week before no date set. It can’t be late. But hey they can break in if needs be. Tenants are on UC. More bills from them and a locksmith that I’ll never recover. You are basically shouting down the phone to get it booked in in writing with the tenant. In the end you phone and email every day. I wanted to slam their heads into the wall. But don’t worry Dave the Plumber always gets in and is never late. They are as thick as pig 💩
I appreciate some people say they have good agents. But in my experience the landlord is responsible for everything. Sure you may be able to pursue the agent.
The agent rips you off and you wind up doing all the work.
I would never recommend an agent 💩
Problem with the agent you used, and all the other big national ones, are that they employ boys to do a man's job, wet behind the ears snowflakes who don't have a clue .
Agreed.
I was thinking of you when I said "I appreciate some people say they have good agents"!
I've been moving most of my properties over to an agent, I have a good local agent that doesn't rip me off, gets me good tenants and good rents, I carry out most repairs myself and if I need a tradesman I pay them direct, not all agents are the same
Have to agree there 👍
Not all are the same but landlords need to do their research and find the ones that actually are professional. We are a good local agent and we certainly go above and beyond. During Covid, we had a vulnerable landlord client. We provided a homecooked roast meal every sunday to his exact liking at no charge which also meant an hours drive there and back to deliver. We did it because it was the right thing to do. Not all agents are the same.
And there’s me next Tuesday doing the rent smart wales course to bring my portfolio under my control from agent 😂 only to minimise rent raises mind.
Good luck with that, the liabilities of landlords in Wales has increased tenfold with this new legislation.
I am sure for some if they can find a good agent it makes the difference between keeping the property and selling up. Problem is agents want 10-20% of the gross rent, not the net profit. There is a big difference!! I used a couple of agents when I started out and soon realised it was a waste of time and money and might as well do it properly myself.
We use a number of local independent agents to manage our 5 rentals. We don't pay more than 10% +VAT, but in return they are doing all the leg work and finding/dealing with tenants, carrying out interim inspections, finding tradesmen etc., we pay the tradesmen's bills with no mark up. I guess it depends how you value your time and whether you can find a decent or half decent agent. Up to 10% for someone else to manage my properties and give me an easier less hassle free life isn't a lot to me. And the fees are tax deductible, my time isn't.
Christopher
I thought that inspections etc arranged by an agent had no markup, but found they take 10%.
To be fair to agents they have had their fees cut in half by the government. Referencing seems to be financial and a bad tenant can get around it. Unfortunately l have had a problem with some applicants trying to claim compensation due to homophobia, racism, whatever.
Really Edwin?
Edwin, We pay between 7.5 and 10% to agents. For this they do the whole thing; find tenants, check references, prepare a list for us to select tenants, deal with deposits, arrange gas certificates etc., compile six monthly inspection reports, arrange maintenance, inspect on departure. Anyway all this will be irrelevant hopefully as we have started the process of getting out.
Jahan, most definitely and a type of rent to rent but to corporate renters. She sounded a good prospect but when l looked into it they didn't have any clients. Further the Serco contract looks rather onerous!
Please tell about the Serco contract. I was considering looking into it. Only so I can rent to a corporate and not have any connection to a tenant as it's just too risk with Rental Reform.
Just think about the lower than low life tenants Serco would be placing in your properties
The place needs doing up anyway. I don't want any contractual relations with the occupier hence the need for a corporate. They can deal with all of Michael Gove's Ombudsmen and apologies to tenants and fines etc.
Nick
You will have to email Serco. The contract that l saw required the landlord to insure the property. Also it could be reassigned away from Serco. They are advertising north west midlands and the east of England.
Insuring the property is fine. I guess Serco could lose the contract. Then you wind up with someone else. Whoever the government gives the contract to.
Serco contract
Try property118 website contract ts very poor
Nick
With their builk buying that should be able to get much better terms than an individual. They know who is being insured, you don't. What do you think that an insurance company is going to to make of a 20 year old Afghanistan male asylum seeker ?
I work in construction and property. It's normal for the owner to insure their own building. Or if work is done on an existing building the owner takes out insurance in joint names with the contractor. If it's new build then the contractor insures the building.
I don't think anyone would look favourably on the 20 year old Afghan male asylum seeker. But what do people make of African single mother asylum seekers with half a dozen kids? I spy mould and trouble which is what I have had...
Nick
You are deluding yourself. Serco would be easily able to get the best insurance deals. However judging on what's coming from Sunak and Macron, the floodgates are being opened! Obviously for the best of humanitarian reasons.
I'm not looking at rates. I agree Serco could probably secure better rates. It's about who should / is best placed to insure the risk.
Agreed that large letting agents are awful! Too expensive, front end negotiators that don't care and are just interested in box ticking. Call centre management services not handled by the same experienced member of staff, who don't live locally and who take no personal responsibility. Not to mention the use of facilities management companies for maintenance at extortionate prices and accounts departments that are uncontactable and automated.
That said, if you're a landlord who thinks they have peace of legislation covered, every legal document correctly completed, have every signed tenant receipt of compliance with witness certificates and indisputable audit trails, and finally, if you're all over what's coming over the next year and taking action now to be fully prepared..... then brilliant and well done! I guarantee though that you are 1 in 100 landlords.
I have run my own letting agency since 1988, I have what's app communication with most of my clients, an encyclopaedic knowledge of housing law (sorry if that sounds conceited)...and I am always all over the few bad tenants I have come across, and all over what's on the way. Taking action now to protect and ensure my clients have the necessary advance advice is my current MO.
In conclusion, the answer is to use a small independent proprietor owned, (regulated of course) lettings agent like me!
With respect, I am seeing so many private, over confident landlords with nowhere near the knowledge they think they have, and subsequently failing to get possession on technicalities.
Fine if you have a good tenant, but life will become very different in the next year or so in the PRS and you will repent at you're own leisure if you don't get things 100% right.
I have my tin hat donned, but I bet a pound to a penny that this post ages well.
Good post. It's my experience. As I said above my agent messed up the deposit paperwork and the tenants fee ban. They also emailed the EPC and Right to Rent book which is should have been given my hand or by post. So many small areas to trip up as a landlord. I can't think all very deliberate too.
John
Sounds great. So put your company down, or an indicator of it. However staff turnover of letting agents is huge. Further the government has cut agents fees by half, making it impossible for agents.
It's all about your own experience. Back in the day i used agents. They were very poor indeed. I understand the industry became much more professional, brought about by the property collapse in 2007/8.
I did use an agent back around 3 years ago, I'm now getting these tenants evicted! Says it all for me.
I have no doubt that there are good agents out there as has been reflected on this site.
Me too. Agent 3 years ago and now I’m going through eviction.
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