A recent article in Australia’s RPM magazine urged landlords not to cut out the letting agent owing to the multiple risks involved in doing so: tax, identity checks, risk of fraud and the ability to evict or sue the tenant were all mentioned among reasons not to go direct. The newspaper hence advocates that landlords should continue to hire letting agents to rent out their properties.
UK landlords are facing a similar dilemma – numerous online start ups are attempting to cut out the middleman and to make it easier for landlords to find tenants directly, online, without letting agents. In addition, the market sees an abundance of online agents undercutting traditional ones by operating without high street offices.
While the tenant search process will continue to move online, major challenges remain for landlords looking to do it without letting agent, and additional layers of regulation are acting as a headwind for UK landlords and also for letting agents. For instance, mandatory landlord registration for landlord licensing schemes is being implemented in some councils, although so far restricted to areas where many live in poor housing conditions (e.g. London Borough of Newham). In addition, the government is now requiring landlord immigration checks to be performed in order to make sure housing in the private rental sector (PRS) does not go to illegal immigrants and that tenants have the right to rent.
What do UK landlords say about dealing online?
We surveyed over 200 landlords to find out how UK landlords feel about dealing with or without letting agent, and what their priorities are. The key findings are the following:
- Finding the right tenant is the number one priority for landlords, more important than the rent landlords receive or the time it takes to find the tenants.
- There appears to be a strong correlation between the age of the landlord and their interest in online tenant searches. Also, the interest in new online solutions among London landlords is above the national average.
- Currently, only about 18% of landlords conduct tenant searches online, but c. 80% would be inclined to do so, if they were given the right tools.
- 75% of landlords are happy to be attributed an online trust rating.
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