To use an agency or not? A looming landlord question
The issue of whether landlords should use letting agencies has been a perennial consideration in the rental housing sector. There are various pros and cons, but recent government announcements about intervening in the sector to ban tenant fees and cap deposits have added new considerations.
Should I stay or should I go '
Indeed, a survey by property firm Paragon showed this has had an impact on the thinking of many landlords. It quizzed them on whether a ban on such fees - and a consequent rise in landlord fees imposed by agents to recoup the lost revenue - would change their attitude to using an agency.
The result was that of the 73 per cent of landlords who use an agent or another third party to handle their tenancies, 12 per cent would 'definitely' be discouraged from using their services if fees rose, and 18 per cent said they 'probably' would.
However, at the same time 16 per cent were clear that the imposition of higher landlords fees would 'definitely' not discourage them from using third parties, while 30 per cent would 'probably' not be deterred.
With 'don't knows' making up the remainder, it is clear there is a wide range of opinions on the matter, with those who may be described as 'maybe' - whether to a greater or lesser extent - being the most prominent. This means many will respond to any forthcoming rise in fees by considering their options before deciding what to do.
Much to think about
Reflecting on the survey's findings, managing director for mortgages at Paragon John Heron said: "In the midst of ongoing turbulence in the private rented sector, landlords have already had to navigate through challenging policy changes, and rethink their strategies accordingly.
"An increase in landlord costs as a result of a ban on tenant fees would be the latest in a succession of challenges and it’s unsurprising to learn that a substantial number of landlords might consider altering their approach to letting out their properties in that circumstance."
It is certainly true that many landlords already manage their affairs on their own, so those who are unsure about what to do should not worry too much: they would be in good company if they took this approach. Equally, it is clear those who have not established a definitive position on how to respond to higher fees are also far from alone.
Key considerations landlords should think about include how much time, effort and organisational ability they will need when dealing themselves with issues like drawing up an inventory, chasing up references and handling deposits. They will also need to be acquainted with finer points of law that might otherwise be handled by agents. Those who are confident about these matters might find self-management best, but for the majority who use agencies, it is worth thinking very hard about whether for the sake of saving the cost of fees they can suddenly deal with everything on their own.
No caps please, we're landlords
Landlords are at least in agreement on the question of caps for deposits. Only seven per cent oppose a statutory upper limit, even though there is disagreement on the most appropriate figure. 22 per cent think one month is the ideal, 46 per cent favour two months and 14 per cent consider three months the right amount.
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Image: iStock/AlexRaths30-November-17General Lettings News