A recent survey of over 2000 private landlords by USwitch, has indicated that the majority of private landlords would consider switching to a letting agency, largely because of the current complexity of buy to let; with agents’ knowledge of the sector being cited as one of the biggest reasons for switching.
The following lists the other major observations from the survey:
- Almost a third of landlords say agents’ capacity to manage repairs provides another reason to instruct a professional.
- 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% cited this as the main reason)
- Another 31% of landlords surveyed, said repairs are a major reason they would sell their properties entirely. This was the second most common reason given.
- Another major reason landlords consider switching is to avoid the hassle of finding tenants (30%) and to transfer legal responsibilities of a property (30%), both of which may mitigate a landlord’s anxieties around the unstable buy-to-let market.
- Interestingly, the USwitch survey also found that agencies are also more likely to accept tenants: 99% of independent landlords had to reject a tenancy application at some point, while just 88% of professional lettings agents said they have done so. We believe that this reflects the fact that lettings agents typically have much more rigorous pre-screening processes, which are conducted before allowing a property viewing or formal application.
- Over a quarter of landlords (27%) would switch to a letting agency to avoid scams and fraud. False or inconsistent information coupled with deliberate 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% of landlords have turned down applicants after checking their credit score.
We agree with many of the comments and sentiment in the USwitch survey. In particular, both the Renters Reform Bill and higher interest rates on mortgages (without the ability to offset this as a tax deductable cost) are having a huge knock-on effect on the residential property investment market. Landlords will likely find the coming months even more challenging than recent years have been.
However, selling up is not the only option, there are other ways landlords can remain profitable during the cost-of-living crisis. Switching to a professional lettings 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 will also take on much of the responsibility of owning investment property: advertising, tenant sourcing, lettings management, repairs, rental disputes and complaints can all be tackled by an agency.
Each of the co-owners of Lifeboat Lettings are also professional landlords and property investors themselves and are actively involved in the day to day operations of the agency. They are focused on doing the best they can for their managed landlords to keeping their costs (and their own) down to as low a level as possible whilst delivering a professional lettings management service.
