13th
Sep 2013
New research has revealed that 53% of UK landlords deal directly with tenants, bypassing letting agents.
In the latest research carried out by a business insurance company has found that over 50% of UK landlords are dealing direct with tenants and are cutting out letting agents.
Landlords who are increasingly taking this route say they have not used an estate agent in over a year and therefore are not incurring the costs of finding new tenants and the day to day running of the properties which saves them on average across 5.3 properties, £734.
To increase profits on their properties landlords are reducing their costs and cutting out the middle men (agents and property managers) comes out on top over insurance, re-decoration and repairs. The majority of UK landlords hold the correct insurance however the research found that 20% are not taking out appropriate insurance which potentially puts their tenants and themselves at risk.
The head of the insurance company, Jazz Gakhal, said: “Buy-to-let is growing in popularity as a result of rising rental prices and cheap mortgage lending, and many new landlords appear to be taking a much more hands-on approach. Estate agent fees can run into thousands of pounds a year, so landlords that can deal with the tenant directly stand to make big financial gains.
“Landlords may be able to make significant savings by taking their properties into their own hands, but it’s vital to have appropriate insurance should the worst happen.”
PIMS Overview - Use an agent or not
The agent's job is to take the burden away from the landlord so they do not have to deal with compliance and management issues.
Some Landlords use agents on a tenant find basis whilst others opt for Letting and rent collection or full management. It is critical where using an Agent you fully understand what you are engaging them to do and you satisfy yourself they are performing their duties. Should they fail in their duties you as the Landlord will always be liable for their actions - for they are your agent.
The decision to use an agent or not is highly subjective and one that may be based on factors such as time and effort versus cost of your time and the time you have available.
What will the agent's fees be and what is this money worth to you. Furthermore what time and resources are you willing to commit to managing the property and tenants yourself. Its a lifestyle choice fees vs time and ability.
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How to select an Agent |
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What will your agent do for you? |
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Recommendations from other landlords
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Choose 3 agents in the local area and visit them all in person
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Check their organisation skills – ask them to do three things. These can be quite small as posting terms & conditions, e-mailing you their contact details and confirming their tenancy deposit scheme. Check that they do this, if they don’t they haven’t noted your request or just haven’t done it – either way this displays poor organisation.
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Don’t take them at face value – many people can talk a good game but don’t deliver.
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Your Agent should have Client Money Protection Insurance for should their business fail you will be an unsecured creditor and liable for losses such as Tenants Deposits not lawfully being held / protected
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This will be defined by your management agreement and terms of engagement
They may be appointed on Tenant find, rent collection or full service. Services they provide include
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Production of AST– tenancy contract
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Periodic inspection reports
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Rental statements and payment less fees
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Please ensure you obtain copies of such documents for you are penultimately responsible.
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At the very least you need copy of the tenancy agreement, information relating to deposit protection and copies of ANY notices served upon the tenant.
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