Are more landlords about to ditch letting agents and go it alone?
A significant number of buy-to-let landlords do not use letting agents to find or manage properties, and it has been suggested that many more should consider ditching ‘rip-off agents’.
Buy-to-let landlords have once again come under the media spotlight following the announcement last week that there will be a ban on letting agents charging fees to tenants, which many experts believe will lead to higher rents, as landlords seek to raise extra funds to help support agents who will undoubtedly shift the fees on to them.
But one commentator has suggested that it is easy for landlords to avoid becoming “villains” after the tenants fee ban by choosing to simply “ditch rip-off agents”.
Simon Lambert, editor of This is Money, wrote on the website: “Landlords are always ripe for a kicking in some circles, so it should come as no surprise that they were swiftly painted as potential future villains in the ban on tenant fees.
“The theory on the news that Chancellor Philip Hammond would ban tenant fees in his Autumn Statement was that buy-to-let owners would respond by passing on higher costs through rent rises.”
But Lambert suggested that buy-to-let landlords have as much right to be “as angry as tenants over letting agency fees”.
“Many [landlords] pay handsomely for letting and management already and the fees they pay are meant to cover many of the things that some unscrupulous letting agents also charge tenants for.
“A check with their agent on the level of double-charging going on would leave a landlord as grumpy as their tenant.”
Lambert also pointed out that landlords do not profit from these tenant fees – “they go to the agent”. Consequently, while agents will be keen to maintain their revenues, the financial journalist believes that an attempt to simply claw back lost earnings by “lumping extra costs” on to landlords would be a “high risk strategy”.
“Those landlords, already facing a tax and mortgage squeeze, are likely to see any big hikes as a catalyst to move elsewhere.”
He continued: “Ask any long-term landlord and they will tell you that the difficulty is in finding a good letting agent, who takes all the worry of sorting any problems for you off your hands. They will have a network including plumbers, electricians, and handymen or women, who can get things fixed ASAP, do essential maintenance swiftly and at a fair cost and keep your tenants happy.
“Happy tenants are the key to buy-to-let success, as unless you are in a hot property area such as London where places rent instantly, its vital to avoid rental voids. Even one month of your property sitting unlet but your mortgage and other bills needing paying, proves expensive.
“Yet many landlords stick with letting agents who don't do a great job for them, overcharge them for maintenance, double-charge them and tenants for the same work, and upset tenants with demands for unfair fees.
“If your agent can't explain exactly what the charge is for and justify the cost and why you aren't already paying for this, leave.”