The chief executive of a still-to-be-launched property portal says Christmas may have come early for letting agents because of the “huge opportunity” they now have to increase fees for landlords.
Antony Codling - the former City analyst whose clients at the consultancy Jefferies included Countrywide and Zoopla - is now the chief executive of Rummage4, a property portal said to be launching this year.
He took to Twitter following the release of the government’s Private Landlord Survey with a message that echoed a theme he touched upon two weeks ago in his presentation to the Guild of Property Professionals - the chance for letting agents to levy higher fees on landlords for services, to compensate for the loss of other income.
Codling tweeted at the weekend: “Huge opportunity for agents to replace tenant fees with landlord fees. Government survey reports 52 per cent of landlords do not use an agent. Increase awareness of landlord responsibilities could increase use of agents. With snow on the ground has Christmas come early in 2019 for agents?”
The Private Landlord Survey, released by the Ministry of Housing, Communities and Local Government, shows that 52 per cent of landlords do not use a lettings agent or management company to handle their portfolios.
On a sample of 8,000 landlords who responded to a survey, the MHCLG says only 34 per cent even use an agent for let-only and fewer than one in 10 use an agency to handle lettings and management.
In a summary of changes to the private rental sector since 2010, when the last Private Landlord Survey was undertaken, the document notes the raft of tax, stamp duty and regulatory changes that have been implemented and replays a familiar mantra: “These changes were made as part of the government’s wider efforts to make the housing market work for everyone and to ensure the housing market delivers the homes the nation needs.”
Despite these tax and rule changes, however, some 53 per cent of the 8,000 responded say they plan to keep their buy to let investment the same size as today while 10 per cent say they will sell some or all units and a similar 11 per cent say they will increase their buy to let investment.
As we reported on Estate Agent Today on Friday, government figures just released have also shown that 70 per cent of landlords kept their rents the same when they most recently renewed a tenancy, and the average length of time a private sector tenant had lived in their current home was up from 3.9 years in 2016/17 to 4.1 years in 2017/18, the most recent data available.
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Good luck on hiking the fees up, is this person mad?
Meanwhile agents are paying contractors less.
What planet is that guy on?
With the raft of additional tax reforms hitting landlords pockets they are going to be selling up or cutting costs. Agents who have become reliant on charging a months rent to find a tenant, double digit management fees and fleecing tenants will soon be a thing of the past. In fact, I'd go so far as to say that any letting agency which cannot survive on total fees of less than 85 of gross rents collected is going to find things very tough indeed.
It's time for agents to cut costs, streamline their businesses through automation or face oblivion.
A new wave of landlords will soon begin to enter the market with a fresh new set of expectations and with re-aligned, long term investment strategies. This is what the industry needs. For every one landlord who exits due to their inability to cope with new letting agent fee structures, mounting legislative obligations and the loss of any tax benefits for those with high borrowings, a new landlord will enter the market who's financial planning caters for a new, more sustainable PRS. Landlords who currently live from one rent payment to the next, with little or no margin built in to cope with unexpected outlays and the costs associated with regulating the sector, will struggle to survive the years ahead. Government policy is now set to drive out this latter type of landlord as many now feel they cannot provide a tenant with sufficient security and should therefore not be operating in our evolving and improving PRS. With the introduction of a level playing field for all landlords to operate on, and with good old fashioned 'supply & demand' economics, rents will find their correct level to ensure property investment is still a viable and very attractive option for the modern landlord investor.
I think you must be from the same planet as Antony Codling
come on rob, you cant be serious. if you actually go online searching for places to rent, you will notice the hike in rental fees and lower deposit. gone were the days when tenant can rent for 200-250 per month. its now double just because of all these new regulations surrounding renting and licencing. thank you very much for taking interest in protecting the tenant and hiking up the rent. who do we blame?
He's not entirely wrong, the sector does need more long term landlords who view it as a decade or longer investment. That isn't to say that the 1-2 property Landlords should leave, or that their contribution towards combating homelessness isn't appreciated, simply that we are more likely to see longer term Landlords in the future.
HOWEVER, the ones who have a property rented out as part of an inheritance trust, or homeowners who need to move away for work for a couple of years should not be pushed out, or have things mounted against them; they too are providing homes.
Apopoo customers be aware!
Agents have already streamlined, already survived on low commissions...there is no where to go ...apart from increasing commissions. Landlords will have a choice pay an agent a fair price for a fair job of work probably 14 to 15 % or do it themselves.
If they do it themselves they will need to run their rental affairs to a professional standard, and will require back up services to assist them. Once they have reached a professional landlord standard no doubt joining a redress scheme and using specialist letting software, then they will be eligible no doubt to get an account on Rightmove and the other portals ( as developers and builders already do )....so weakened trade only property advertising....brave new world
I know two agents that have no intention of increasing fees (so they say). They are instead adding sales to their offer. They say they do not need to sell many each year to cover the loss of tenant fees.
Increasing legislation and licensing represents a huge opportunity for agents. 15 years ago fees were similar if not higher (% wise) to now yet your average landlord was lucky to get a signed tenancy agreement and a gas safety certificate. Now an agency can take care of almost every legislative requirement a landlord has- and justify charging fees to do so. It's not an easy sell, nor is it an easy/clean message to convey but once you get it right you will win clients at higher fees. We are very firm on our fees of 12% Let Only and 18% Fully Managed and continue to win clients despite often being in competition with agents charging as much as 1/3 less. Some landlords instantly get our value with others, some need convincing and others we respect their decision but stay in touch safe in the knowledge that some day down the line a cut-fee agent will (probably) slip up and that's when we win them back. I often say 'we are Landlords 1st choice 2nd time round'- that's because landlords often are swayed initially by low fees, local market presence, flashy offices, magazine ads etc but these aren't signs of a quality service- when things go wrong, their requirements change to reviews, awards and associations and that's when we are hard to beat. Likewise, Landlords who have always gone solo are under huge pressure to be compliant and many will find that the value of an agent Vs the risk and cost of regulatory breach hard to argue against and some (at least) will transition across to agency.
actually, that is also applicable to fees charge to tenants. its justified fees for taking tenants around the variety of accomodation they have on their books until the tenant decided on one particular ones and then the letting agent charge the landlord fees for finding the tenants and contract and check in and inventories etc etc. no
Dear S I
When you went to school you should have been taught the following:-
Full stop, space, capital letter.
But then judging by your grammar you probably did not go to school.
Regards
Paul R
Dear PR, get a life. stop wasting space here if you got nothing else to contribute constructively regarding prs. regards SI
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