Landlords using agents due to buy to let taxes
The proportion of landlords who use a letting agent to help manage their property has spiked since the end of last year, possibly due to buy to let taxes kicking in.
A survey of 754 landlords conducted by the National Landlords’ Association shows that 61 per cent currently use a letting agent – a rise of seven per cent since the final quarter of 2016.
The sudden rise represents a break from the norm as the proportion of landlords who use an agent has remained relatively consistent over the last few years.
The research also shows the proportion of landlords who self-manage has decreased by nearly 10 per cent over the last year – falling from 46 per cent to 39.
The news comes as the recent changes to buy to let taxation, as well as the planned ban on charging fees to tenants, are expected to increase the strains on letting agents’ and landlords’ businesses in the coming months.
“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” admits Richard Lambert, NLA chief executive.
“However, this sudden spike, which is completely out of step with recent trends, completely turns this theory on its head. The big question is whether or not it’s a blip or if it will continue to rise” he adds.
Richard Price, executive director at UKALA – the UK Association of Letting Agents – says: “There have been some regional fluctuations, but overall these findings show that an increasing proportion of landlords rely on agents at present, which is testament to the professional work undertaken by the vast majority of agents in the sector. It’s an uncertain time for anyone who owns a buy-to-let property, so the steady hand of a reputable agent is exactly what many landlords are looking for right now”.
The findings show that more landlords in the North East use an agent compared to any other English region, although agent usage is highest in Scotland (79 per cent).
In the North West, where there has been a five per cent decrease since the end of 2016, landlords are the least reliant on agents compared to other UK regions – at 56 per cent.
The findings are positive news for agents in the regions of outer London, the South West, and Wales – where there have been significant increases in reliance from landlords.