Ask any landlord and they’ll tell you… There’s really no such thing as “passive income”. The duties of a landlord are many and varied, and since most landlords manage their properties alongside a full-time job, it can make for an extremely busy and stressful life.
Is it any wonder that so many landlords choose to make their lives easier by leaning on letting agents to help to manage and occupy their properties? A 2018 report by property portal Zoopla State Of The Property Nation, suggests that tenants lean heavily on letting agents too. The report reveals a significant increase in the amount of private tenants who use letting agents to find new accommodation.
Zoopla’s inquiries revealed that nearly half of private tenants (48%) used the services of a letting agent to source their rental property this year. This figure represents a 12% increase from the findings of the same report in 2017 which revealed recorded 36%.
Out of the 6,000 people surveyed, 62% admitted that they expected to rent for at least the next three years, before considering owning a property. 23% of respondents stated that they expected to rent a home indefinitely. In an uncertain and historically under-regulated housing market and the impending impact of Brexit it’s not hard to see why.
Meanwhile, the number of homeowners letting out their properties to tenants rose from just 2.4% in 2016 to 4.2% this year. The future clearly seems to belong to landlords… but it’s not all smiles and sunshine!
The lot of landlords
The research demonstrates that landlords will still facing a number of challenges in the existing housing climate.
56% of landlords surveyed by the study stated that their biggest challenge was still finding suitable tenants to occupy their property. The second biggest obstacle was ensuring that their tenants give their properties the due care, attention and basic maintenance that they need (55%). Furthermore, 47% shared a concern over tenants paying their rent on time.
39% of landlords found it difficult to keep up with recent increases in regulation, whilea further 36% were concerned about how future legislation will affect them.
Letting agents also had their share of concerns with 38% expecting a drop in lettings revenue in 2019, as agents face the prospect of the tenant fees ban’s introduction in 2019.
An encouraging note
Managing Director of Zoopla’s Property Division, Charlie Bryant stated that while the report implied some areas of concern for landlords and letting agents alike, there was still much to be hopeful about in 2019 and beyond:
“It’s certainly a challenging time for lettings agents, with the ban on lettings fees looming. However, our research shows that demand for agents’ services and rented accommodation are strong, and that should come as a welcome boost.
“As the market becomes more regulated and complex, the letting agents that adopt a more consultative approach with both their landlord and their tenant clients, to help navigate them through, will gain an advantage.”
He went on to emphasise the importance of staying ahead of the trends of a changing market and observing new rules, ending on an encouraging note by saying that “those who do it best are set to thrive.”