Private Landlords turn to Agencies to Retain Profit

 

This has been a tough year for most private landlords – new taxes for those looking to build a portfolio, uncertainty following the abolition of letting agent fees and a political landscape which makes investment more difficult have resulted in the need to protect profit whenever it arises.

https://www.buyassociation.co.uk/2016/12/16/pessimistic-brexit-countrys-economy/

As overstretched landlords face even further tax increases, legislative costs and running expenses, forward-thinking property investors are finding new ways to make buy-to-let a viable option and figures suggest that they are turning to the internet. While a report from UKALA that suggests that nearly half of landlords will forgo the services of their letting agent if profits fall*, savvy landlords may find online agencies a good way to help minimise costs.

Online agent Upad has just reported a 44% annual growth in repeat business for its digital lettings services and this year alone has let over 10,000 properties, the equivalent of a 60 branch high street agent.

James Davis, CEO and Founder of Upad, comments: “What we are seeing is swathes of landlords under mounting financial pressure looking for ways to bring down their costs in order to keep buy-to-let as a profitable exercise. It makes sense that one of the first things they will look at is the agent they use to manage their property as well as scrutinise every single cost associated with this. Upad figures suggest that landlords save £750 per tenancy on a single tenancy and for overstretched buy to let investors, this saving could lead to thousands of pounds with a larger portfolio to manage.”

In the last 12 months landlords have taken the brunt of most governmental tax increases, with stamp duty costs increasing for buy to let investors and more recently the likelihood of bearing the cost of tenant fees. This charge alone could cost landlords upwards of £500 per tenancy. The biggest hit is still to come in 2020 when mortgage interest will no longer be tax deductible and landlords will receive a tax rate based on gross income and then paid a flat 20% rebate.

https://www.buyassociation.co.uk/2016/12/14/uk-property-can-trump-brexit-couldnt/

Meanwhile, a boutique property agency has suggested that the top of the London property market will face an uncertain start to 2017.

Jake Russell, a Director of Prime Central London estate agent, Russell Simpson, says much like 2014, 2015 and 2016, the UK will begin the New Year with an opaque and uncertain future ahead.

As with the Scottish Referendum, the General Election and the EU Referendum; the forthcoming year will be dominated by yet another landmark political event in the triggering of Article 50.”

“As with any trading market, uncertainty breeds caution and indecision, and as such we can expect continued low levels of activity. Overshadowing this, however, is the toxic and destructive levels of Stamp Duty Land Tax, which must be reconsidered by the government. Ultimately, it will be our job to bring clarity to the confusion that exists in the marketplace, and to provide solutions that suit each individual case.

“In terms of market performance, the product of the above makes for a simple equation – we expect minimal to 0% price capital growth in property prices in 2017; a prevailing opinion shared with a number of the other key plays in Prime Central London.”

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Private Landlords turn to Agencies to Retain Profit

Private Landlords turn to Agencies to Retain Profit

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