Letting agents sell ahead of the Renters’ Rights Bill

Reply to the comment left by Reluctant Landlord at 05/03/2025 – 13:43
For those “professional” landlords, especially those larger incorporated businesses, they probably won’t need an agent.

The “non-professional”, non-incorporated landlords that cannot offset their finance costs against their rents are more likely to have to use the services of an agent to reduce the risk of them renting their properties. Many more property owners will decide not to bother renting their properties out, especially for periods below 1 year, even if they are empty; but for those landlords that do decide to continue renting, they will have to charge more rent to service the costs of using their agent, and more rent to cover the cost of the extra tax that they are being charged as a consequence of being unable to offset their finance costs.

The risks of renting a property out are lower for an incorporated business than they are for a small, non-incorporated landlord. The primary reason for using an agent is to decrease your risk, but it does have a cost and in the end, the tenant pays that cost.

Reply to the comment left by Reluctant Landlord at 05/03/2025 – 13:51
You also need to add a couple of hundred per month, due to increased risk, as a result of lower deposits, and the fact that the courts/tribunals will be overwhelmed, and it will take 12+ months to get a rent increase agreed, or to get a tenant out.

At the same time, you may as well insist on a property backed guarantor, to cover some of the risk.

If tenants can’t meet these conditions for your investment then probably best to sell and put your money in funds/savings accounts – less risk and less hassle, maybe a better return, and you can cash in whenever you want to.

Agents will need to consider their portfolios. If older PRS properties form a large percentage of their portfolio and the tenants are mostly claiming benefit, they’re probably better off winding down the business.

OTOH, if their portfolios consist of mostly more modern, well-insulated homes, with good quality working tenants, they should be fine

Look at the BTR model. If you can’t beat ‘em, join ‘em.

apparently the house of lords are thinking of allowing section 21 to continue to be allowed by landlords who own something like 5/6 or less properties…so this is a good thing for the small landlords…and also the house of lords have said that courts should be able to handle section 21 cases quickly and this section 21 should only come in when the courts are ready which will be quite some time…so i think section 21 is going to be delayed by the house of lords ….that’s going to upset tenants…and tenants of small landlords will probably be still removed by section 21….

I haven’t managed to work out who exactly benefits from this Renter’s Rights Bill. Obviously Landlords are selling up and getting out. Tenants are facing an ever shrinking pool of available properties and thus increased rents. The Gov will lose out on Revenue and small estate agents will go bust.
It seems to me that there are 1000 times more errant Tenants than there are Landlords so why is this Bill not addressing this? Surely it should be called the Landlords and Tenants Rights Bill and be fair to both sides?
Personally I think the system has worked well for years and doesn’t need changing. Tenants have been able to report Private Landlords to the LA all along and regardless of any Bill you will always get good and bad on both sides and that is the minority that needs dealing with!!!

Reply to the comment left by Godfrey Jones at 06/03/2025 – 09:11
I also haven’t managed to work out who benefits from this bill, but it isn’t tenants. Larger incorporated landlords may benefit because they can still offset their finance costs against rents and they will be operating in a less competitive market where they will also be able to raise rents more easily. Small landlords (the majority) won’t benefit.

The bill should be called the Landlords and Tenants Rights Bill and be fair to both sides as you suggest, but it isn’t because the politicians driving it either want to be seen to be punishing an enemy, or want an electorate that is dependent upon them, or both. If the House of Lords is introducing some sense and competence into the bill to stop it punishing small landlords and therefore also unnecessarily inflicting pain on tenants, good for the House of Lords.

If I were a letting agent I’d be extremely worried. Why should a landlord use a letting agent when the tenant can serve notice on day 1, finding fees will have to go completely.
As far as I can see, self management and rgi is pretty much the only way to go as the agent provides zero security. If you can’t get things fixed find a builder and pay him a few% a month.

I am a small landlord and have a small letting agency. The letting agency spends most of its time letting properties and dealing with tenants maintenance problems, neither of which most landlords want to do, we know all our tenants well and rarely have had to evict anyone, so there is still room for well managed small agencies. I do agree with the general thought that it will make small agents be more picky about the type of properties/tenants they take on. It is yet another piece of legislation that will do the opposite of what it is supposed to do. More risky tenants will find it harder to rent in the PRS.

Reply to the comment left by Birminghamlandlord at 08/03/2025 – 09:54
But you will provide no ability to remove the tenant so you are basically a receptionist ringing a plumber and taking 20% on top. I feel much safer with rgi, paid yearly, not monthly at a percentage as you’ll try do. Provide landlords a proper service then maybe but we’re years beyond that. Your best bet is to position youself to take over management as common hold phases in. Otherwise you’re just lying to yourself and customers.

Mark I don’t quite understand the point you are making RGI is a great product to take some of the risk out of renting and we offer this especially when tenants are new.
You are correct that agents have to provide a proper service and then they can easily earn their commission.
My point is about agencies becoming more picky about the landlords and properties they take on, as the new legislation gives us all less protection against rogue tenants