Landlords in the UK are often divided over whether it is worth using letting agents, or whether it is more effective to self-manage, and it often depends on the type of landlord you are.
Letting agents for the UK rental sector can offer anything from a full-scale, end-to-end service, taking almost all responsibility from the property owner, or they can provide a more pared-down option for those who are happy to have more input into the running of their rental home.
Generally, letting agents take a pre-agreed percentage of your rental income in return for their service, so the more involved they are, the more it costs. Yet, particularly for portfolio landlords, investors from overseas or those living far from their properties, it’s an expense that can pay off.
A new study conducted by Uswitch found that 63% of landlords surveyed who do not currently use letting agents said that they would be prepared to start using them in the future. One of the biggest reasons for this is to allow them to rely on the agent’s knowledge of the buy-to-let sector.
Navigating a complex market
For amateur landlords just starting out, it can quickly become apparent that there are many rules and regulations to follow in the buy-to-let market, with changes being made all the time for landlords to stay abreast of.
While there are many resources available to help you keep up with sector knowledge, for some, handing the reins over to an agent can be understandably preferable. While it is still the landlord’s responsibility to comply with the law, agents are experts in the field.
Another reason almost a third of landlords were considering opting for letting agents was to make it easier to manage repairs and property maintenance. Those opting for a full-scale service option can delegate any issues like this to the agent to sort out directly with the tenant, which can be more straightforward.
On the flip side, though, landlords who live locally to their property or properties, or those who only let out one home, often find that they can carry out some repairs themselves, without incurring the high costs that can come with bringing in tradespeople.
The hassle of finding tenants was also cited as a top reason to work with letting agents, as well as transferring the legal responsibilities of letting a property. Others also said that switching to a letting agency would help them avoid scams and fraud.
Letting agents offering ‘alluring packages’
Undoubtedly, buy-to-let landlords who self-manage can save a lot of money compared with using an agent. There are now many online portals and companies that can provide everything you need to rent your property, from listings to tenant vetting processes to tenancy agreements, at a much lower cost, such as OpenRent.
However, according to Uswitch spokesperson Kellie Steed, in some circumstances letting agents can offer a way of landlords staying in the market, for those who feel unable to take on many of the responsibilities of managing a rental property themselves.
“While it can feel like selling up is the only option, there are other ways landlords can keep profits afloat during the cost of living crisis.
“Switching to a letting 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 can also take on much of the responsibility of owning investment property: lettings, repairs, rental disputes and complaints can all be tackled by an agency. Many offer increasingly alluring packages for landlords in return for around 10 to 20 per cent of profits.”