With research revealing that 65% of landlords manage their own portfolio, how can letting agents attract more landlords and retain existing ones?
It’s clear that landlords have been faced with numerous challenges brought about by the pandemic as the lettings industry contends with various Covid restrictions.
But despite landlords faced with rising rent arrears and changing legislation, as well as operating under a new normal, a significant number continue to manage their own rental properties.
A study by industry suppliers mydeposits and Ome found that 65% of landlords currently manage their own portfolio. The survey of over 14,000 landlords, agents, and tenants covered factors such as challenges and changes in the market, the impact of the pandemic, regulation, government support, and more.
It discovered only 13% of landlords used full management via an agent, while 16% were both self-managed and agent-managed. Some 31% were confident with their choice of property management.
Interestingly, 65% of landlord respondents believe the industry has changed for the worse, citing reasons linked to regulation, legislation, and tax. However, 79% still plan to remain in the buy-to-let sector over the next five years.
It’s become increasingly important for landlords to take a more professional approach to their investment, have a sound understanding of buy-to-let legislation, and remain compliant throughout. However, this can be difficult without a professional agency on hand to protect their most valuable assets – which is far more crucial as we navigate the ongoing implications of Covid.
This presents an ideal opportunity for letting agents to outline the benefits of property management; helping to deal with tenants, minimise void periods, and eradicate stress.
Below, we list our top tips for encouraging self-managing landlords to use your agency.
1. Guaranteed rent scheme and rent protection
The economic impact of the pandemic has prohibited many tenants from paying their rent.
This, coupled with recent legislation such as the evictions ban, has seen rent arrears peak across the UK over recent months
With some tenants struggling to pay their rent, landlords are not receiving steady rental income, which puts pressure on buy-to-let mortgage payments. This could put your own management fees at risk.
To circumvent this, agents should have the right measures in place to offer protection to landlords against defaults on rental payments.
We also provide cover for 75% of the rent for up to three months after vacant possession, and up to £100,000 to cover eviction costs if the tenant is in breach of their tenancy agreement.
Rent guarantee products can help to protect landlords’ cash flow, ensuring peace of mind that they will receive regular income even if their tenant is unable to pay.
Offering a quality rent protection scheme will encourage landlords to stick with your services, helping to improve client retention rates.
Need further assistance? Our experienced in-house Legal and Claims team can guide you and your landlords through the complex eviction process to ensure compliance at every step.
2. Staying compliant in an ever-changing landscape
Landlords have had to deal with a rising number of compliance obligations in recent years, making their investment more time-consuming and riskier from a financial and legal perspective.
The support of a professional agency will allow landlords to remain compliant and increase their chances of a smooth-running tenancy, helping to generate regular rental income.
For example, with many local authorities launching consultations or introducing licensing schemes in the past year, landlords are likely to need greater support from their letting agent.
This includes information on licence fee costs, how long it lasts for and if any additional property standards are expected.
As an agent, it’s important to communicate news of any local consultations, giving your landlords the opportunity to shape future policies that will directly affect them.
Support will also be required for completing applications, providing relevant paperwork and meeting deadlines.
Of course, landlords will also need to be clued up on other compliance obligations, including tenancy deposits, electrical safety, health and safety standards, Right to Rent checks, maintenance and repairs, and more – all of which can be overseen by a letting agent.
Landlords are dealing with stricter time constraints and increased pressure, so the role of letting agents is crucial in helping landlords to keep on top of their responsibilities and protect their finances.
3. Tenant referencing offers transparency
Landlords need to have trust in a tenant before they can begin the tenancy process, and letting agents can help to facilitate this via comprehensive tenant referencing.
Referencing confirms details such as the tenant’s past behaviour in other rented properties and their ability to pay rent on time, to ensure that the right renter has been selected.
There are several forms of referencing that exist, such as landlord referencing, credit checks, tenant affordability, and Right to Rent referencing – all of which can be undertaken by the letting agent.
Completing thorough checks on each applicant can prevent the risk of fraudulent tenants being accepted for properties.
This is especially vital at the moment as many letting agents and landlords are unable to meet the applicant in person themselves before the move in due to Covid restrictions.
As the UK’s leading supplier of tenant referencing and specialist protection for the private rented sector, we take the risk out of property rentals through our comprehensive referencing service.
We can guarantee the full picture of each applicant in a timely manner, providing agents with a detailed final report of potential tenants within 48 hours of logging the reference.
Whether it’s using our own internal databases compiled over 25 years, or accessing information stored on the National Fraud Database accessed using CIFAS – we always go that step further to help you find suitable tenants for your landlords.
Ready for referencing? Our specialist referencing department completes over 500,000 references a year and performs a multitude of checks to provide an objective assessment.
Despite challenges, the rental sector can still be profitable for landlords if they have the right management processes in place.
By using the above advice and promoting their benefits widely, agents can improve their chances of securing more business from landlords who currently self-manage.