UK landlords surveyed who use a letting agent estimate that they save £1910 a year more than if they marketed directly to tenants, according to research by Endsleigh, one of the country’s leading specialist insurance providers for letting agents, landlords and young professionals.
The survey of 500 UK landlords has uncovered widespread misconceptions among landlords about the value for money offered by lettings agents. Staggeringly, more than half of landlords surveyed (53%) currently choose to rent out at least one of their properties privately without the help of an agent, with more than two in five of those indicating that cost is a reason for this. This comes despite an average reported monthly saving of £159 per month among those using letting agents
The findings come amid speculation that the recently announced ban on letting agent fees for tenants will cause costs for landlords to rise and potentially be passed on to tenants. Consequently, a perceived lack of value for money from UK letting agents could see a rise in the number of landlords who choose to let directly to the market, despite the financial savings made from working with an agent.
The savings are likely related to services which help to guard against costly void periods. Three in four (76%) respondents reported that their agent tends to help them proactively find tenants, as well as other services, such as help with legal and financial matters, which are entrusted to agents which contribute to a reduction in overall costs.
The survey suggests that relationships between letting agents and landlords are not about the financial benefits alone. The findings show that, of those who use an agent, half (50%) were most attracted to their current agent because of their local knowledge, and more than two in five (44%) claim that excellent service is a deciding factor.
Quality of life has also proved to be a factor. Two in five (41%) feel that the main benefit of working with an agent is that it provides peace of mind, and a quarter of landlords (25%) communicate with their lettings agent on a weekly basis. Estate agents save those surveyed an average of 5 hours every month.
David Hadden, Head of Property, Endsleigh said: “Landlords who use letting agents find them very useful – especially before a letting – and state they help to reduce stress, free up time and, critically, save them money.
“The perceived cost of using a letting agent is among the biggest deterrents for many landlords, but those that do use an agent are on average reporting significant savings. Landlords considering letting their properties directly to tenants in light of changing legislation must seek advice to avoid potentially compromising their income, their quality of life and the provision of support and service that agents can offer. ”
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