In recent years, landlords’ use of an agent in property transactions remained consistent, rising by only 1% from 2014 to 2016 from 53% to 54%. But since early 2017, there has been a sudden surge in this figure, according to a new survey of property investors by the National Landlords Association (NLA).
Of the 800 landlords surveyed, 61% said they currently use a lettings agent to manage their property, a rise of 7% since the last quarter of 2016.
This means of every 10 landlords in the UK, at least 6 of them now use letting agents. The research also revealed that a greater proportion are using property managers, as the proportion of landlords who self-manage their properties dropped by almost 10% in 2016 last year to 39%.
It appears that agent usage is highest in Scotland at a staggering 79%. In England, landlords in the North East of England are more likely to use an agent than any other region. In many London regions, the South West, and Wales there have been significant increases in the use of agents and demand is on the rise.
Only in the North West, where landlords are least reliant on agents than any other UK region, has agent use dropped - by 5% since the end of 2016.
Why the sudden change in lettings agent usage ?
It is possible that recent policy developments such as a forthcoming ban on charging tenant fees and buy-to-let taxation are having a greater effect than anticipated. These changes are adding to the strains on landlords’ businesses, so many more are seeking the steady hand of a reputable agent.
‘As landlords plan ahead to compensate for the tax changes over the next few years, we would expect to see the number who use an agent to slowly fall away, and for more to start considering whether they are able to manage their properties themselves,’ said Richard Lambert, NLA chief executive officer.
Instead the opposite seems to be happening. According to Richard Price, executive director of the UK Association of Letting Agents (UKALA) the fact that more landlords are relying on agents is testament to the professional work undertaken by the vast majority of agents in the private rented sector.
So, watch this space. As the various pieces of legislation come into effect it will be interesting to see whether this ‘sudden spike’ turns into an upward trend in the use of lettings agents.