Don’t resort to desperate measures
We know that the Tenant Fee Ban has cost letting agents dearly, with an estimated loss of £314.5 million paid to letting agents by tenants*. But desperate times do not always call for desperate measures …
Hundreds of thousands of landlords are potentially running illegal lets, after failing to keep up with a raft of legislative changes. We’re not talking about unscrupulous ‘cram them in, pile them high’ or rogue landlords but self-managing property investors who are genuinely unaware of their legal obligations.
Confirmation of the crisis has come from two sources. While compiling our ‘Why let-only is a losing game for London letting agents’ report – a free-to-access paper compiled with input from independent industry expert, Kate Faulkner – we uncovered an increasing need for professional property management amongst landlords. In fact, 80% of landlords contacted admitted to finding it impossible, very difficult or quite difficult to keep up with constant regulation changes in the Private Rented Sector
Shortly after the release of the ARPM report, Market Financial Solutions went public with its own research, which also highlighted how the UK’s landlords are struggling to keep up with new legislative and regulatory reforms.
According to its survey of 400 UK landlords, 30% do not understand the changes to House in Multiple Occupation licensing, which came into effect in October 2018, while 28% are not aware of the proposed abolition of Section 21, announced at the start of June 2019. Additionally, more than 27% are uncertain about the tenant fees ban and a further 19% say they understand the new act but are unsure how it will affect them.
ARPM understands that there are almost one million landlords who only use letting agents for tenant find services or do not currently use the services of a letting agent at all. That’s a massive untapped market of confused and possibly unknowingly unlawful landlords who would benefit from the guidance and professional help of a letting agent.
It’s also worth remembering that while the focus is on keeping up with the industry changes that have already happened, we may not have seen the back of reforms. Property commentators and professionals are holding their breath as to what may come following the election of a new Prime Minister, with the possibility of a snap general election and a potential change of Government still lurking on the horizon.
If self-managing landlords are already finding it difficult to follow and implement new legislation, more will slip into the illegal realm in the coming months. As the industry reaches a point of legislative saturation, full property management is an essential service for landlords looking to operate within the law.Back to knowledge hub