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Landlords Leaning Towards Letting Agents to Navigate Increased Complications

The property landscape is witnessing a growing inclination amongst private landlords to employ the services of letting agencies, with research by Uswitch revealing that 63% of them are considering this shift. The primary motivators for this transition are diverse, ranging from a desire to mitigate the responsibilities of repair to evading potential scams and fraudulent activities.

A substantial 32% of landlords identified the relief from managing repairs as the primary catalyst for opting for a letting agent. Close behind, 30% of landlords are making the switch to better navigate legal requirements and to avoid the hassles of finding tenants. On a related note, the study disclosed that property maintenance currently drains approximately one-fifth of the landlords’ income.

The apparent diminishing profits in property ventures are pushing landlords towards contemplation of selling their properties, with 35% citing lack of profits as the chief reason. Concurrently, 32% of landlords perceive the burdens of repairs as a significant factor, positioning it as the second most cited reason for selling their properties.

Interestingly, about 29% of landlords believe that letting agents possess superior market knowledge, and 27% think that employing an agent significantly reduces the risks associated with scams and fraud. This sentiment aligns with the findings that false information and fraudulent applications are leading causes for potential tenant rejections, experienced by over one-third (34%) of landlords.

However, amidst these shifting preferences, a minor 16% of landlords expressed their intentions to continue managing the processes independently. This tendency to shift towards letting agencies reflects the increasing complexity and risks involved in property management and the burgeoning appeal of the specialised knowledge and security provided by letting agencies in navigating these challenges.

Kellie Steed, Uswitch Buy-to-let Mortgages Expert, commented: “With both the Renters (Reform) Bill and higher interest rates on mortgages having a huge knock-on effect on the residential property investment market, some landlords may find the coming months more challenging than usual.

“Switching to a letting management company offers some attractive advantages and gives landlords the scope to hold onto their investment.

Property managers have a strong knowledge of the market’s changing regulations and can also take on much of the responsibility of owning investment property: lettings, repairs, rental disputes and complaints can all be tackled by an agency.

Many offer increasingly alluring packages for landlords in return for around 10-20% of profits.”