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

MBM Homelets
MBM Homelets 23 Mar 2017

Although this is a very positive step, there is little or no guarantee of the standard of workmanship employed by the tenants. We have had experience of a professionally decorated property being ' painted'...

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ajay
ajay 21 Mar 2017

How is the "robust evidence" looking now?

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NathanG
NathanG 20 Mar 2017

I've been watching the series so far and am completely baffled by the cases that were presented. Though, I don't think that we can protect ourselves from every scam possible - it will just make the scammers...

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Landlady14
Landlady14 01 Mar 2017

You would think so Niraj Shah! My experience only proves that there are varying qualitiers of professional in all aspects of property letting. None of the ones I have dealt with, from letting agents to...

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Mark
Mark 01 Mar 2017

Thanks for this article. Hopefully one day everybody's lifestyle will be eco-sustainable.

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Ben Taylor
Ben Taylor 28 Feb 2017

I was convinced that London was the most expensive!

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Alan Read
Alan Read 28 Feb 2017

Australia are leading the way in this I think. The trouble with Britain is we don't get enough sun to make use of solar power.

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James Powell
James Powell 27 Feb 2017

This is a very good news.

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DanHumphreys
DanHumphreys 27 Feb 2017

It sounds like a good idea. Anything to help the younger generation get a foothold.

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Matt
Matt 20 Feb 2017

Is this fake news?

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Matthew Hollywood
Matthew Hollywood 07 Feb 2017

Matthew Hollywood - Director Mishon Mackay Land & New Homes - Brighton The shortage of New Homes is in part effected by the lack of land sales. Land sales are held back because there is a disparity between...

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CommercialTrust
CommercialTrust 30 Jan 2017

Hi Graham, Would be interesting to see the above figure calculated against an investment via a Lt Company /SPV structure and if the investor found themselves pushed in to the higher tax bracket. Mortgage...

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