Landlords ‘would drop lettings agents if profits fall’

by: Heather Greig-Smith
  • 13/12/2016
  • 0
Landlords ‘would drop lettings agents if profits fall’
Almost half of landlords (47%) would ditch their letting agent if profits began to fall, according to research from the UK Association of Letting Agents (UKALA).

The research was undertaken to gauge the likely impact of changes to landlord taxation coming into effect in April 2017.

It follows warnings by the National Landlords Association (NLA) that more than 400,000 landlords will be pushed up into the next tax bracket by the changes.

Currently, 57% of landlords – around 1.1m – use a letting agent, with 36% doing so regularly.

In the regional breakdown, more than half of Scottish landlords (56%) would forgo the services of an agent if their profits were compromised. However, just one in three landlords (29%) in the West Midlands would do so – the lowest across the UK.

Meanwhile, a quarter (26%) of landlords who use letting agents to exclusively fully manage all of their properties would cut them loose in the face of diminishing profits. This drops to 21% for landlords who use agents on a let-only basis for all their properties.

Only a third (36%) of landlords would retain the services of their agent even if their profits were compromised.

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”.

Richard Lambert, chief executive at the NLA, said: “Landlords should already be looking ahead to the forthcoming tax changes and working out how they will be able to maintain profitability. That will intensify with the prospect of agents’ fees increasing as a result of the ban on charging tenants.

“However, while it may seem an appealing proposition to minimise your outgoings, the majority of landlords simply won’t have the resources to deliver a service that meets the standards or professionalism that their agent currently provides”.

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