From next year, letting agents could see a dent to their profits when the government bans tenant fees, and a new survey has found that most landlords and tenants would prefer to remove agents from the process altogether.
When asked whether they would be happier renting directly to a tenant rather than going through a traditional letting agent, 87% of landlords said they would in the latest survey by online lettings platform HomeRenter. Of the tenants asked the same question about cutting out the agent and renting directly from a landlord, 70% stated they would opt for this.
A study by the National Landlords Association earlier this year found that 61% of landlords currently use an agent to let out their properties, but it seems that attitudes are beginning to change, particularly with the advent of new technologies and online platforms making it easier for landlords and tenants to find each other without the use of a traditional agent.
High fees and poor service
Some of the main issues faced by landlords, according to HomeRenter’s survey, include high fees and poor service provided by letting agencies, cited as a problem by 52% of respondents, with bad tenants affecting 50% and managing repairs and maintenance causing issues for 42%.
On the tenant side, only 45% said that they were happy renting, with 42% citing unreasonable letting admin fees as their main cause for discontent, while 41% said having to chase for repairs and maintenance was an issue, 36% were negatively affected by having to pay security deposits, and 33% had experienced poor letting agent service.
One landlord, James Kent from Surrey, commented: “My partner and I felt the high-street fees weren’t aligned to the service on offer, especially as we were prepared to go down more of a do-it-yourself approach to managing our properties.”
He added: “It’s important to meet tenants in person to round out the referencing process and to establish a rapport which helps ensure a successful tenancy.”
Considering going it alone…
On the plus side, letting agents can arguably take some of the stress and hassle out of the process. For the landlord, agents will advertise your property, find and vet tenants, organise all the paperwork, and can collect rents and manage the property once the tenants are in. This can be particularly helpful for portfolio landlords, or those who don’t live near their buy-to-let property. Tenants can benefit by the added security of using a high-street agent who they can trust, and not having to deal with busy landlords when repairs or maintenance work needs doing.
However, the monthly fees charged to landlords, as well as the agency fees charged to tenants when they take out their letting agreement, can be a major downside for many. Landlords who are prepared to go it alone can find that the money they save makes up for the extra effort they need to put into finding and managing tenants.
With tenant fees set to be scrapped, potentially saving them an average £200-£300 at the start of every tenancy, many are speculating that agents will simply pass on the shortfall in costs to the landlord, which will ultimately be passed onto the tenant at the bottom of the chain, meaning that growing numbers could start thinking about cutting out the middle man.
