About 57 per cent of private landlords employ a letting agent; roughly one third do so all of the time and one fifth some of the time – most often when they’ve a problem property that just doesn’t want to let.
The implication must be, therefore, that letting agents are pretty useful. But are they indispensable?
In purely black and white terms, obviously not, after all more than four in ten make do on their own without even occasionally instructing an agent to help out.
Interestingly, it is those landlords with only one property who are more likely to forego professional services in favour of self-management; even though it is quite likely that these are the least experienced and less well equipped to deal with the trials and tribulations of letting property and managing tenancies.
Reading between the lines it looks as though these landlords are the most likely not to engage an agent, at least in part, because they make the least profit, and when margins are tight anything deemed unnecessary gets cut.
With that in mind it is worth noting that, according to a recent NLA survey, a whopping 46 per cent of landlords said that they would forgo using an agent if times got tough.
Worse still, this figure increases the larger the portfolio, with six in ten landlords of more than 20 properties prepared to turn their backs on their letting agent if their profits were to dip.
And here’s the rub. Landlords are facing a challenging time in the next few years. Their ability to off-set finance costs against income is to be severely restricted from April 2017 onward; accounting rules in respect of furnishings and wear and tear have changed – costing many landlords significant sums. Not to mention the inexorable rise in compliance costs for those subject to HMO or discretionary licensing as such schemes continue to proliferate.
All in all, as costs rise one of two things will happen, rents will follow-suit or margins will be squeezed making it essential that agents position themselves as indispensable paragons of value.
A big part of this is making sure that customers understand what they are getting from their agent, what it is worth and how much time and effort employing an agent is saving them every year.
Make sure they know that as an agent:
- You are local, always on the scene, so they don’t have to be.
- You are professional, courteous and helpful to their tenants – even when it would be easier not to be
- Your staff are well trained and accredited by a reputable body like UKALA
- You are a member of an approved redress scheme and have appropriate indemnity and client money protection insurance; protecting your clients should anything go wrong
- You know what to do to make sure deposits are always protected lawfully – so they wont end up in court
- You’re up to date with all the myriad changes in legislation waiting to catch-out self-managing landlords
- You are experts in marketing and advertising to make sure good tenants are found quickly
- You work for them, and will make sure that their investment performs as well as possible.
A landlord who understands what their agent does for them is certainly more likely to value that service and ultimately may start to view it as indispensable.