A prominent lettings agent says educating landlords about the need to use agents should be the industry’s number one priority.
Agent Rainmaker founder Sally Lawson, who is also a former ARLA Propertymark president, says in a podcast with the Guild of Property Professionals: “We all thought the tenant fee ban was the end of the world, however, it all made us stop and look our businesses and revamp them, which ultimately has turned out to be a good thing. What we now have is a variety of lettings agents niching out into different areas of expertise and offering a wider range of services.”
She continues: “Since then, we have had a new evolution of the let-only landlord, which is a big thing now. There is a massive rise in landlords choosing to let and manage their own properties, with the recent government's white paper announcing a figure of only 18 per cent of landlords use a lettings agent for fully managed. I was quite shocked by that number.
“There is another number that says that 49 per cent of landlords use a lettings agent to let the property, but less than 20 per cent put their property through a managed service. That must be one of the main challenges facing lettings agents now.
“Another challenge is that many of the landlords who purchased their property 25 years ago are coming to the end of their mortgages, and many don’t have a repayment solution, so are deciding to sell or retire. This will bring about a sort of changing of the guard, which is a potential challenge. The third challenge, which will also impact the sales sector, is the rising costs.”
She tells Guild chief executive Iain McKenzie: “I think the reason that many landlords are choosing let-only at the moment, is simply because they believe they know enough to let and manage the property themselves. The reality is that most landlords, who own one or two properties, will only know the basics and certainty don’t know all 170 pieces of legislation that apply to lettings or what happens if they fall foul of them.
“The key thing that agents need to do it to educate landlords and help them understand the potentially painful consequences of not adhering to the legislation. Looking at the statistics the government released, as lettings agents we need to be focused on the 18 per cent, and work on converting let-only landlords to fully managed.
“There are a lot of landlords out there who will be falling foul of very dangerous rules who will have a lot of problems. I think it is our duty to help them by helping them understand what they don’t know and getting them converted to fully managed – it needs to be a number one priority.”
Lawson also uses the podcast to explain how she started in the industry in 1989.
“The moment I was old enough to, I bought my first flat when the interest rates were around 15 per cent. This meant that I didn’t have much money left over for furniture, or for that matter, milk in my cornflakes. Despite the challenges I was happy that I achieved my goal of becoming a homeowner. However, not long after moving in, I decided to rent the property out.
“When the lettings agent came around to have a look at my property, I thought what an interesting career that would be, so I asked if they had any jobs going, which they did, and that is how I got into the industry” she adds.
“I could see that there was a massive opportunity within the lettings sector in 1989/1990, a time when the assured shorthold tenancy had been created from the housing act. This meant that there was the prospect for landlords to do short-term lettings as opposed to the old stationary periodic tenancy. The sector was growing and there was an opportunity for a lettings business thrive.”
You can listen to the podcast here.