The growth of the Private Rented Sector (PRS) over the past decade has been nothing short of phenomenal.
Last year, the Intermediary Mortgage Lenders Association reported that if current market conditions continue, over half of homes will be privately rented by 2032.
And more recently, PricewaterhouseCoopers published research which suggests that by 2025, 7.2 million of us will be privately renting – approximately 25% of the population – as home ownership levels fall from 68% to around 60%.
Consequently, the role of a residential letting agent has evolved as the market has expanded. And while increased regulation is welcomed as it aims to stamp out rogue operators, there is no denying that today's letting agents are responsible for more than ever before.
It’s interesting to see how our industry has developed, software firm OnBoardPro recently carried out a study, looking into agents' ever-evolving role and we’ve been given exclusive access to the research to see what the word is on the high street…
The past decade
- April 2006: Scottish landlords must join the national register before letting property
- April 2012: It became mandatory for rented properties to have an Energy Performance Certificate
- November 2013: Advertising Standards Authority rules for agents to include information about non-optional fees in adverts
- November 2012: Letting agent fees charged to tenants banned in Scotland
- October 2014: It became mandatory for letting agents to be a member of one of three government-approved redress schemes
- February 2014: Landlords and agents required to carry out Legionnaires’ disease risk assessment after updated guidance from Health and Safety Executive
- May 2015: Mandatory for all letting agents to disclose full fee tariff, as well as highlighting which redress scheme they are a member of and whether they offer client money protection
- June 2015: Under the Deregulation Act, it became mandatory for the small number of deposits taken before April 6 2007 which then became periodic to be protected with one of three schemes
- Ongoing: HMRC requesting agents to provide a list of landlords they have collected rent on behalf of
- Ongoing: The introduction of high profile selective landlord licensing schemes in areas across the UK including Liverpool and several parts of London
- October 2015: It will be mandatory for all rented properties to have a carbon monoxide alarm that is checked regularly
- October 2015: Smoke alarms to be fitted on every floor of any rented property
- October 2015: Changes under the Deregulation Act will affect landlords’ ability to serve a Section 21 notice if they or their agent do not handle repair requests properly
- 2016: Landlords and agents will be required to carry out energy improvements to rental properties as requested by tenants
- 2018: It will be illegal for properties to be let unless they have an Energy Performance rating of ‘E’ of above
- TBC: Right to Rent immigration checks to be rolled out nationally
- TBC: Proposed localised rent controls and landlord repossession changes in Scotland
Here's what a number of letting agents from up and down the country had to say about how they feel their role has changed in the past and how it is set to evolve in the future:
“I don’t feel the front end of the job has really changed. It’s no different today than it was five, 10 or 20 years ago. However, it’s the backend, the legalities, which have and are changing all the time. This makes doing the job – if being compliant and safe – more costly for the agent, landlord and ultimately the tenant.”
- Karl Knipe, Director, Kings Group (London)
“Scotland has much to be proud of in the Private Rented Sector. A sharp focus on tenant safety and rights has led to enlightened legislation and rules over many years. However, it is sad to see the industry in danger of losing its way. Stimulating the supply side should be the absolute priority. Misconceived tenancy reform, including localised rent control, seems to be on the way. If this comes, a reduction in supply is certain.”
- Brian Callaghan, Founder, Letting Solutions (West Lothian)
“The last five years have seen significant changes, and more importantly, an improvement to the UK lettings industry. Under the guidance of a professional letting agent when basic steps are followed the relationship between landlord, tenant and agent is a harmonious one.”
“A competent experienced letting agent with local knowledge and national accreditation will guide landlords through this entire process. Many dual selling and letting agents will manage the process from purchase to tenant, find to full management; whilst limiting the mounting costs where possible and provide a safe and well maintained property for many years to come.”
- Talitha Setz, Lettings Director, Mishon Mackay (Brighton and Hove)
“Most of the changes brought into the rental market are positive and designed to protect consumers and encourage those providing a service (landlords and agents) to raise their standards.”
“Often the effectiveness of some of these changes can be hard to measure, especially with the market changing so rapidly, making it difficult for regulation to keep pace and remain relevant. Competition for letting agents remains high, especially since there is no legal requirement to have a formal qualification to be an estate agent; therefore anything which helps the good stand out from the bad, in our opinion, can only be positive.”
- Simon Kerley, Lettings Manager, Capital & Coastal (Bournemouth)
“As the demand for renting grows, so has the number of lettings agents. Over the past five years we have seen rogue traders leaving landlords and tenants out of pocket. The rules and regulations have been getting tighter to prevent these issues from happening, which is great for landlords.”
- Kenny Sahota, Director, Amilli Property (East London)
So there we have it – there is no doubting the magnitude of the changes letting agents have had to incorporate into their everyday working routines. Looking at the current agenda of potential change, then there will be plenty more to come as we move towards 2020. What all this does show is how staying efficient and working in a professional manner will allow letting agents to take on as many landlords as possible and expand their businesses accordingly.