While landlords might once have chosen to manage buy-to-let properties themselves to maximise profits, recent changes to the law mean they may no longer have this option.
The heavy legislation of today’s private rented sector means being a truly DIY landlord is now difficult to achieve. The Housing (Wales) Act 2014, for example, resulted in the setting up of Rent Smart Wales, which processes landlord registrations and grants licences to landlords and agents.
From last November only agents and landlords who have been trained by approved bodies on “relevant up-to-date information in order to successfully manage tenancies within the law” can manage properties to let.1
Landlords in Scotland and Northern Ireland need to be registered. Those in England and Wales must be licensed to run a large house in multiple occupation (HMO). The definition of a large HMO is that is rented to five or more people who form more than one household, is at least three storeys high and the tenants share facilities such as a toilet or kitchen. In some local authorities in England, further additional and selective licensing exists.
Self-managing a property can be a very positive experience, allowing landlords to build relationships with tenants and service providers John Stewart, Residential Landlords Association
What this means is that few landlords can have a DIY arrangement and today the choice for landlords is to either take on the full responsibility of the 400+ rules and regulations to let a property and all the fines for breaches or noncompliance that go with it – up to £30,000 from April – or to consider outsourcing this to a qualified letting agent.
The decision really comes down to time and knowledge. If a landlord is not prepared, or able, to spend time keeping abreast of letting law and health and safety requirements, or doesn’t want to be disturbed anytime during the 365 days of the year about leaks, chase non-payment of rent or sort out tenant disputes with neighbours, it is probably better to pass this responsibility to an agent.
This also applies to landlords who aren’t local to their property or are letting their home while abroad. Today’s tenants are very much seen as “customers” and require experienced day-to-day management with issues sorted quickly.
However, for those landlords that see their role as a professional and want to be involved in the day-to-day running of their properties, it can be worthwhile. John Stewart, policy manager at the Residential Landlords Association, says: “Self-managing a property can be a very positive experience, allowing landlords to build relationships with their own tenants and service providers.
“It enables landlords to retain full control over all major decisions from referencing to cost of maintenance, as well as saving money on agents’ fees. However, landlords will need to spend time on keeping up-to-date with national and local legislation and take full responsibility for getting things right.
“Landlords that do use an agent should bear in mind that handing over management to an agent doesn’t mean they can ignore legislation and they are still liable for civil penalties, rent repayment orders or prosecution if the agent makes an error. So it’s essential to choose a reputable agent from the outset.”
Finding a professional agent, however, isn’t always easy. Many landlords don’t realise that letting agents are not regulated.
Dorian Gonsalves, chief operating officer of lettings company Belvoir, says: “Governments across the UK seem to have made it clear they do not see the future of the rental market as a cottage industry, with recent changes suggesting they want privately rented homes managed professionally, whether that is through institutions that are building rental developments or letting agents who offer high service standards.
“By renting through a qualified letting agent, landlords can rest assured their property is being let legally and safely and should anything go wrong, both they and their tenants have access to an ombudsman, free of charge.”
To ensure landlords secure a good agent, they should check they:
Are a member of the National Approved Letting Scheme (NALS), the Royal Institution of Chartered Surveyors (RICS) or Association of Residential Letting Agents (ARLA), organisations that keep members up-to-date with the law and best practice
- Have client money protection
- Offer easy-to-read terms and conditions that clarify what the landlord and tenant are responsible for
- Give clarity on fees charged
- Carry out regular property period checks
- It is worth remembering that any agent fees charged are currently tax-deductible.
If you’re looking for a local agent to manage your rental property, Northwood Northampton are proud to have client money in place and are members of NALS, and would be more than happy to discuss your service needs.
Please get in contact by calling the office on 01604 607080 or complete your information using the following link http://www.northwooduk.com/branches/northampton-estate-agents#contact-us and the friendly team at Northwood Northampton will get in contact with you.