It has been an age-old dilemma for landlords: do it yourself or work alongside a letting agent. But these days, the pendulum is swinging increasingly in favour of the latter option.
Why? Because being a landlord in 2023 is no longer about organising tradespeople to fix things and then sitting back and collecting the rent.
Take a closer look and consider what a suitable letting agent can offer to landlords in today's highly regulated marketplace.
Traditionally, letting agents have generally offered landlords a choice of three services
- Finding a tenant
- Finding tenant/rent collection
- Fully managed service
Many landlords are opposed to paying someone else to do a job they believe they could manage just as well.
But these days, the private rented sector is a highly-regulated marketplace where non-compliance can result in hefty fines, and ignorance of the law is no defence.
Many local authorities began to launch licensing schemes in December 2022, charging landlords with record fines.
Besides local authority rules, landlords now face many other regulatory changes relating to tenant ID checks, energy efficiency and over 25 compliance rules regarding Health and Safety.
And this is not to mention the changes coming down the track in the form of the Renters' Reform Bill, which had its first Commons reading in May.
Proposals in the Bill include:
- the removal of Section 21 (so-called 'no fault') evictions;
- improved grounds for possession under Section 8;
- the change from assured shorthold tenancies to periodic;
- the creation of a property ombudsman to which every landlord must be signed up.
This entire regulatory framework demands landlords' time simply to stay abreast of the raft of changes coming their way.
Letting agents, of course, have to keep up with these changes as a routine part of their day job. They manage large portfolios on a day-to-day basis, stay one step ahead of Government legislation and can, from a position of experience and knowledge, give best advice on how to keep on the right side of the law.
Additionally, good letting agents know their markets – especially valuable during these days of sharply changing rental prices as tenant demand soars.
They offer additional services like inventory and referencing, credit checks, check-ins, check-outs and mid-term inspections. They can even handle disputes with tenants through deposit protection schemes.
Complex market
Although they charge for their services, they save the landlords time and worry, leaving them clear to think strategically about their portfolios and their business.
Rising demand and rising rents would indicate a bright future for the sector. Property ownership should remain a sound investment providing regular revenue and capital growth. But it is becoming harder and harder for the part-time landlord to manage their properties in an increasingly complex market.
Landlords and letting agents can embrace the future in partnership. The agents have the knowledge and experience to cope with an ever-changing business environment, perfectly positioned to help landlords get the best possible return on their investment while protecting them from non-compliance dangers.