Almost half of landlords ‘willing to drop letting agents to maintain profits’

Almost half of landlords say they would forego the services of their letting agent if their profits began to fall, but a different picture emerges when faced with what type of service they would do themselves.

A poll of 900 landlords by the UK Association of Letting Agents (UKALA) found that 47% would forego the services of their letting agent if their profits began to fall as a result of the buy-to-let taxation changes.

Regionally, more landlords in Scotland (56%) would ditch their agent if their profits were compromised than anywhere else in the UK. However, just one in three landlords in the West Midlands would forego their agent – the lowest across the UK.

In central and outer London 47% and 52% respectively said they would lose their agent.

Region

Would forego agent

Would not forego agent

Don’t know

East England

54

38

8

East Midlands

44

40

16

Central London

47

36

17

Outer London

52

31

17

North East

42

40

18

North West

50

34

16

Scotland

56

33

11

South East

53

31

16

South West

38

44

18

Wales

49

32

19

West Midlands

29

39

32

Yorkshire

38

38

24

However, when landlords were later asked to describe what services they receive from agents and if they would forego it, the results suggest the job of the agent is pretty safe.

A quarter of landlords who use letting agents to exclusively fully manage all of their properties would cut them loose, while 41% would keep them on. Of those using an agent for a let-only basis, 30% said they would retain them and 21% said they would let them go if their profits were hit.

It is only those who occasionally use a lettings agent who appear to be most willing to drop them. Almost a quarter (23%) who occasionally use an agent for let-only said they would scrap them while 13% of those using them for full management said they would go without.

Use of agent services

Would you forego your agent?

Yes

No

Don’t know

Let only for all properties

21%

30%

25%

Full management for all properties

26%

41%

35%

Combination of both for all properties

13%

12%

14%

Occasionally let only

23%

8%

13%

Occasionally full management

13%

10%

13%

Richard Price, executive director of UKALA, said: “A significant number of landlords will be hit hard by the tax changes and agents’ fees will be one of the items underneath the magnifying glass if profits begin to decrease.

“As landlords’ costs inevitably rise, agents will need to do more to position themselves as indispensable and make it obvious that they provide solid value for money. Otherwise, as future tenancies come to an end, landlords will either shop around or start to consider self-managing their properties.”

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2 Comments

  1. 123430

    If the head line is true, large/corporate agents will struggle and consolidate (which they are already doing) and the dodgy ones (bedroom agents) will almost disappear when the lettings fee ban kicks in. Only the strong independent who offer genuine service and competitive but not rip off fees will do well. There will be good Landlords who will need good agents, the strong independent will certainly see an increase in demand, when these Landlords move from the more expensive less personalised corporates in search of better less expensive agents. I think the market will favour the small independent to the large, the dodgy and certainly the impersonal cheap bang them out onliners.

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  2. Woodentop

    What this is saying is they don’t want to loose money and neither do they want the headache of looking after their properties. I would say over 50% of private landlords haven’t a clue what is involved when the wheel comes off and who do they turn to ? … answer on a postage stamp.

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