Almost Half of Landlords Would Stop Using Letting Agents if Profits Fell
Almost half of UK landlords would stop using their letting agents if their profits fell as a result of forthcoming tax changes, according to the UK Association of Letting Agents (UKALA).
The study was conducted to assess what impact the reduction in mortgage interest tax relief could have on letting agents when it is gradually introduced from April next year.
Almost Half of Landlords Would Stop Using Letting Agents if Profits Fell
Almost Half of Landlords Would Stop Using Letting Agents if Profits Fell
The news arrives as yet another blow to agents across the country, following the recently announced ban on tenant fees, which is likely to increase charges for landlords so that agents can cover their costs.
Overall, 57% of landlords – around 1.1m – say they employ the services of a letting agent, with 36% being regular users and 21% occasional users.
Regionally, more landlords in Scotland would stop using their agent if their profits fell than anywhere else in the UK. Contrastingly, just one in three landlords in the West Midlands would ditch their agent – the lowest number in the UK.
The study also revealed that a quarter of landlords who use letting agents to exclusively manage all of their properties would forego their services in the face of declining profits. This drops to a fifth of landlords who use agents on a let-only basis.
A third of landlords would retain the services of their agent, even if their profits were compromised.
The Executive Director of the UKALA, Richard Price, says: “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 indispensible, 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, the Chief Executive of the NLA, also comments: “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 of professionalism that their agent currently provides.”
Would you stop using a letting agents if your profits dropped?