Letting agents can be a landlords best friend, but what exactly is a letting agent and how can they help the 2.6 million landlords currently in the UK?
A letting agent can help most aspects of a rental property. From fully managed services to limited support, letting agents assist landlords in property management, rent collection, and much more.
Whether you’re considering the idea of letting your property, looking to make some extra income, or recently inherited a property, keep reading! Here you’ll learn exactly what a letting is, the many services they offer, and how to choose a successful and reputable agency.
What is a Letting Agent?
In short, a letting agent acts as the go-between for a landlord and a tenant. Letting agents not only help landlords find and reference tenants but they can assist with rent collection, inventory checklists, maintenance, repairs, and all necessary paperwork (among other things).
Letting agents will also facilitate the two parties in drafting and signing a tenancy agreement. While some agents charge a percentage of the monthly rent, others charge for individual services. The letting agent fees you pay are based primarily on how involved you want the agent to be in the rental process. To compare letting agent fees, use Rentround’s comparison tool for free!
Some landlords choose to do most of the legwork themselves but simply need help finding suitable tenants (possibly in this case an online letting agent may be suitable, e.g. OpenRent), whereas other landlords want to sit back, collect passive income, and let their letting agent take care of the rest.
Letting Agent vs. Estate Agent
You may be wondering the difference between a letting agent and an estate agent. The main difference is that a letting agent helps you rent your property while estate agents are responsible for property sales.
Unfortunately, the difference between these two professionals isn’t always so cut and dry.
Letting agents deal strictly with letting properties. They help landlords find tenants and perform a myriad of services and duties, which we’ll cover in a moment. Estate agents can double as letting agents but their primary focus is marketing homes for sale.
Some estate agents, however, also offer property management and letting services.
Estate agents are skilled in negotiating the sale price of a property or a letting agreement. In short, estate agents administer and secure the acquisition and disposal of properties, guaranteeing that all transactions are performed legally.
Letting Agent Services and Duties Explained
If you already know that you plan to let your property, not sell it, you’ll want the help of an experienced letting agent. Now, the only thing to determine is which services you’ll need based on your circumstances and budget.
Let’s take a closer look at common letting agent services and agent duties.
Fully Managed Services
Let’s start at the top. If you’re a landlord looking for passive income minus the stress, you may want to invest in fully managed letting services. While this type of service will cost you the most, it will be well worth it.
Once you find a reputable letting agent, they will do everything from start to finish. This includes finding and referencing tenants, conducting viewings of the property, marketing your rental, performing necessary repairs and maintenance, making an inventory checklist, collecting rent, completing all necessary paperwork, and even performing evictions if needed.
This is the best option for accidental landlords or anyone who doesn’t have the time or ability to perform all the duties that come with owning a rental property.
Finding and Referencing Tenants
Most landlords will agree that finding and referencing reliable tenants is the hardest part of owning a rental property — second only to collecting rent.
If you don’t mind looking after your rental property, you can hire an agent to find and reference suitable tenants. As part of these duties, the agent will also manage all inquiries, conduct property viewings, collect the deposit and draft the tenancy agreement.
Another popular duty that accompanies tenant referencing is listing and marketing your property. Professional letting agents will list your property on the most popular portals including Rightmove and Zoopla for maximum exposure.
Not only does this increase your chances of finding a tenant but also shortens vacancy periods.
This duty may also include an inventory check. If you’re letting out a fully furnished property, you need an inventory list not only of the property’s contents but also their condition.
Many letting agents will also take photographs to document the condition of the items and the property. These materials are priceless if there’s ever a dispute over damage to the property or its contents.
The only thing more tedious and stressful than finding quality tenants is collecting rent. When a tenant falls into arrears on their monthly payments it puts you in both a financial and moral dilemma.
Financially, you need the rental income to pay any overhead fees. Morally, it can be difficult and uncomfortable to approach your renters about late payments. Hiring a letting agent to do this for you helps you maintain a positive relationship with your tenants. It also prevents tenants from giving you the runaround or a guilt trip.
Letting agents will not only collect each month’s rent and deposit directly into your account but will confront tenants about late payments and file any necessary paperwork in the event you have to evict your tenants. Another service letting agents offer is known as guaranteed rent. As the name suggests, the letting agent will pay you the agreed-upon rental amount each month regardless of whether or not the tenant pays.
They take on the responsibility of going after the tenants for reimbursement. That means you never have to worry about late payments since you’re being paid directly by your letting agent, not your renters.
Landlords can also take up guaranteed rent policies with letting agents. These polices help ensure landlords get their rent (or a proportion of their rent) in the event a tenant is unable to pay.
With nearly 5% of tenancy agreements ending in eviction, this is a real possibility that all landlords must consider. If the word “eviction” makes your skin crawl, you can hire a letting agent to take care of this less-than-pleasant process for you.
Not only are evictions stressful but they’re also extremely time-consuming. Even with just cause for evicting your client, the process can drag out for several months wearing on both your mental health and wallet.
A letting agent will not only handle all the tedious paperwork but also ensure that the tenants leave on time and without damaging the property or its contents. This is where the inventory list from earlier comes into play.
Maintenance and Repairs
All properties need routine maintenance and repairs. If you’re a homeowner, you know that accidents and emergencies occur without warning and at all times of the night. As the investment property owner, it’s your obligation to maintain a healthy and safe atmosphere for your tenants.
This includes performing repairs quickly and efficiently. Not everyone wants to receive a phone call in the middle of the night for a water leak or broken furnace.
You can hire a letting agent to perform these jobs for you. Not only will the agent field calls and perform all necessary repairs but they also have access to contractors and other professionals in the field.
Many letting agents use the same, reputable contractors including electricians, plumbers, and painters. In most cases, the letting agent will pay the contractor and then collect the money from you at a later date or add it to the fees you’re already paying.
You can utilize these same letting agent services when you’re preparing your property for the rental market. An experienced agent can help determine what repairs are necessary and will get you the most revenue.
The property must also meet certain safety regulations, which a knowledgeable agent can help with.
Certifications and Inspections
Speaking of safety regulations, all landlords are required by law to perform certain inspections before renting their property.
They must also provide documentation and certifications to tenants as part of the rental agreement.
An experienced letting agent is familiar with these certifications and inspections and will ensure that you stay on the right side of the law. The most common inspections include gas, electric, heating, plumbing, structural security, leaks, and both smoke and CO2 detectors.
Letting Agent Regulations
In addition to the services a letting agent performs for you, they also have certain legal and moral obligations to you, the client. Redress schemes and ombudsmen are designed to protect landlords from rogue or dishonest letting agents.
Before you hire an agent, regardless of what services they’ll perform for you, it’s important to ensure they’re part of an approved redress scheme.
As more unreliable letting agents were uncovered, UK laws changed in October of 2014. The new law states that all letting and managing agents must be registered with one of three government-approved redress schemes.
These organizations are designed to protect you, the consumer. If you have a complaint against your letting agent, you can seek legal recourse with one of these approved schemes.
The three government-approved schemes are:
- Ombudsman Services
- The Property Ombudsman
- Property Redress Scheme
Each one offers similar services and protections for landlords. These include:
- Ensuring that the letting agent abides by a certain code of conduct.
- Allows landlords to file formal complaints if the letting agent provides inadequate services. The company will perform an investigation free of charge to ensure you receive the level of service you paid for.
- All letting agents that fail to register with one of the above-mentioned schemes will face legal and financial penalties.
Top 5 Letting Agents in the UK
When looking for a reliable letting agent, you can start by checking reviews and making sure the agent is signed up with a government-approved redress scheme. To save you some trouble, here are the most popular and largest letting agencies in the UK right now. While the below are the big player, there are rising stars such as Purplebricks who’s fees may benefit landlords looking for a more hands on approach.
Savills is one of the most established letting agencies in the UK. Founded in 1855, the Savills team is made up of the world’s leading property agents. Their expertise spans the globe with over 600 offices in Europe, America, Asia Pacific, the Middle East, and Africa. Savills takes pride in offering top-notch advice and service for letting, selling, and buying property.
Leaders is one of the largest independent residential property groups currently operating in the UK. With over 120 branches, Leaders specializes in residential letting services as well as sales and buy-to-let investments.
You can rest assured that Leaders is a member of The Property Ombudsman as well as NAEA (National Association of Enrolled Agents) and ARLA (Association of Residential Letting Agents). Leaders takes the time to get to know their customers and makes their satisfaction a top priority.
Hunters’ expert letting agents have detailed insight and knowledge of the current property market. They’re skilled at helping both first-time and experienced landlords. Hunters’ agents will market your property and ensure that the agreement you sign is legally compliant. This agency will help you from start to finish including performing your first valuation to choosing a tenant and even assisting on moving day.
If you’re looking for a large letting agency with in-depth knowledge and experience in the local area, Belvoir agency is one of the UK’s largest property franchises on high street. With over 170 offices with eye-catching shop fronts,
Belvoir is run by passionate, local property experts. Landlords that hire a Belvoir agent have the benefit of working with a national brand employing highly motivated individuals.
Northwood is the UK’s number 1 provider of guaranteed rent, so if bringing in steady income is your top priority, this agency can help. Northwood has over 80 locally-owned letting and estate agencies throughout the UK.
Northwood agents take a professional approach to letting, managing, and selling properties. Landlords also have access to 24/7 online chat services and top-notch customer service.
Find a Reliable Letting Agent to Lower Your Stress and Increase Your Income
There are over 2.6 million landlords in the UK and just under 22,000 letting agents all vying for their business. In 2020 alone, nearly 4.5 million homes were privately rented. To say the property industry is booming would be an understatement!
If you’re looking to break into the letting business as your full- or part-time source of income, finding a reliable letting agent is a great first step.
Now that you know what services letting agents offer and what to expect, you can make an informed decision that delivers the best results for your budget and peace of mind.