47% of UK landlords would ditch their agent if profits fell

47% of UK landlords would ditch their agent if profits fell

New research from the UK Association of Letting Agents has revealed that roughly half of all UK landlords would 'forego the services of their letting agent' if they saw a fall in their profits.

The research was undertaken to assess what impact the forthcoming changes to landlord taxation from April next year could have on agents’ businesses.

The National Landlords Association (NLA) has already warned that more than 400,000 landlords will be pushed up a tax bracket as a result of the changes, potentially forcing them to revaluate the need to employ the services of an agent.

The news will come as another blow to agents, after the recently announced ban on tenant fees could force many to increase charges to their landlord clients in order to cover their costs.

The findings show that overall, 57% of landlords – approximately 1.1m – say they employ the services of a letting agent; with 36% regular users, and 21% occasional users.


Regionally, more landlords in Scotland would ditch their agent if their profits were compromised than anywhere else in the UK. However, just one in three landlords in the West Midlands would forego their agent – the lowest across the UK. A full regional breakdown can be found below.

The findings also show that a quarter of landlords who use letting agents to exclusively fully manage all of their properties would cut them loose in the face of diminishing profits. This drops to a fifth of landlords who use agents on a let-only basis for all their properties.

A third of landlords would retain the services of their agent even if their profits were compromised.

Richard Price, Executive Director of UKALA, said: “A significant number of landlords will be hit hard by the tax changes and agents’ fees will be one of the items underneath the magnifying glass if profits begin to decrease.

As landlords’ costs inevitably rise, agents will need to do more to position themselves as indispensable, and make it obvious that they provide solid value for money.  Otherwise, as future tenancies come to an end, landlords will either shop around or start to consider self-managing their properties”.

Richard Lambert, Chief Executive at the NLA, said: “Landlords should already be looking ahead to the forthcoming tax changes and working out how they will be able to maintain profitability. That will intensify with the prospect of agents’ fees increasing as a result of the ban on charging tenants.
 
However, while it may seem an appealing proposition to minimise your outgoings, the majority of landlords simply won’t have the resources to deliver a service that meets the standards or professionalism that their agent currently provides”.

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Latest Comments

Tony Gimple
Tony Gimple 09 Dec 2017

Linking professionalism to limited company borrowing is a flawed concept. Despite S24 etc., limited companies are the most tax inefficient way of running a property business and leave borrowers seriously...

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Evelyn Attwood
Evelyn Attwood 01 Dec 2017

It's normal. If you plan to buy a house in one of the most beautiful spots in the country you should pay a high price.

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Evelyn Attwood
Evelyn Attwood 01 Dec 2017

I think that the situation will be the same at December.

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Scott Garnet
Scott Garnet 06 Nov 2017

If you have a patio or a porch it is important to make sure that any connecting doors are secured. Good advice for sliding glass doors is replacing the panels with storm resistant glass and getting heavier...

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richardrawlings
richardrawlings 01 Nov 2017

What has not been mentioned here is the effect of not only higher interest payments, but also that these payments are less likely to be offsettable as a business cost due to the scaling back of mortgage...

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Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

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maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

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maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

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zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

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Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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