Renting your property can be both time consuming and expensive. Letting and property management agents provide a number of different types of services to landlords. The level of service will very often determine the amount they charge.
Property management charges are usually commission, based on the annual rental income of your property. You should therefore discuss and compare the charges of different London property management and London lettings agents in the area.
Introduction Only: The introduction service offered by London letting agents very often gives landlords the most basic of all services available. It consists of finding suitable tenants for your London property, applying for references, preparing the tenancy the tenancy agreement and collection of the first month’s rent and deposit. The letting agents’ charges are deducted from the first month’s rent and deposit. As landlord you will be responsible for the deposit and for all future property management issues.
Rent Collection: The rent collection service includes all the services offered under the introduction only service, together with a rent collection service. Once rent is collected the letting agents’ rent collection commission is deducted and balance is paid to the landlord. The landlord is expected to arrange to inspect the property and deal with any repairs under the terms of the agreement. The issues of notices to quit are normally dealt with by the letting agent but the landlord will need to make his or her own arrangements to deal with all aspects of the tenant moving out and related property management issues.
Full Management: The fully managed property service offered is the most comprehensive and deals with almost all the issues of property management required on a daily basis. Urgent repairs and maintenance will be undertaken as needed by the letting agent and quotes will be obtained for other non-essential matters. The payment for any expenditure will be deducted from rents collected before any payments are made to the landlord. For landlords who working or living abroad this property management service is essential as all matters are left in the hands of the letting agent
Owners of buy to let buildings may be sensible in keeping their rental rates at the current level, LettingFocus.com has advised.
David Lawrenson, private rented sector expert at the organisation, commented that any landlord who pushes the rent too high could get stuck with long void periods.
“The sensible landlords will always try and be a bit cheaper than the market [average] if they have got any sense; if you get too greedy then people will just leave and then you have got the property being empty, the hassle of having to recruit a new tenant or you might have the costs of hiring a letting agent,” he pointed out.
It “makes sense” not to be greedy “because ultimately it ends up costing you more than you had planned”, Mr Lawrenson said, so looking at the typical prices for property to rent in London and other areas will help landlords work out “what the market will bear locally”.
London Property to Rent
Demand for private sector residential rentals in Britain has not been this high at any point over the past eight years, according to statistics published by the Association of Residential Letting Agents. ARLA reported that letting agents in much of the country found major shortages in the supply of available properties, particularly as demand appears to keep rising.
Ian Potter, ARLA’s director of operations, noted that seven out of ten letting agents reported that potential homebuyers were turning to the private rental to meet their accommodation needs, as owning a home has become too heavy a financial burden for many young professionals and families.
A total of 81 percent of all letting agents in England’s south-east noted that demand for properties was significantly higher than the available supply of rentals. The supply was only slightly less tight in London, where 73% of agents noted that the number of prospective tenants exceeded the available pool of residential properties.
Both London and the south east, however, tended to exceed the national average, when it came to demand. Nationally, 67 percent of all letting agents in Britain found that demand was higher than supply in the buy-to-let sector.
Tenancy deposit schemes:
- allow tenants to get all or part of their deposit back when they are entitled to it
- make any disputes easier to resolve
- encourage tenants and landlords to make a clear agreement from the start on the condition of the property
- landlords and letting agents who do not protect tenancy deposits will have to pay their tenant back three times the deposit
Within 14 days of receiving a deposit the landlord or agent must give the tenant the details about how their deposit is protected including:
- the contact details of the tenancy deposit scheme selected
- the landlord or agent’s contact details
- how to apply for the release of the deposit
- information explaining the purpose of the deposit
- what to do if there is a dispute about the deposit
A new report from Santander Mortgages shows that being on the property ladder could save people up to £87 a month.
Phil Cliff, director of mortgage marketing at Santander UK said: “The savings to be made through buying, as opposed to renting, have increased dramatically in the last six months.”
According to Santander, an average mortgage repayment is now less than standard rental prices.
People in the north-west would benefit from the biggest savings, which were estimated to be around £141.
However, those in London are still finding it cheaper to rent as an average mortgage is £359 more than the monthly rent.
Prime Minister David Cameron’s Conservative-Liberal Democrat coalition decided to avoid the introduction of more regulation and red tape in the buy-to-let sector. Grant Shapps, the new housing minister, told the House of Commons that there was no compelling need to regulate private residential landlords any further, as a clear majority of the 3 million English residents who live in rental accommodation seem satisfied with their lodging. Shapps pointed out that the government’s role is to ensure that there is a healthy balance between the rights and obligations of residential landlords. At this point, the minister sees no reason to tinker with this balance.
The previous Labour government drafted plans to introduce a new set of red tape and regulations to govern residential landlords. These included requiring landlords to join a national register program, mandating everyone in the buy-to-let sector to draft written agreements with tenants and the introduction of a new set of rules that would have governed letting agents. Shapps spoke directly to landlords, promising not to increase bureaucratic red tape, while also calling on local councils to make effective use of the authority that they already have to deal with a small minority of landlords who provide substandard service.
While the decision not to further regulate the buy-to-let sector may serve as a relief to landlords, some are still concerned that there is too little oversight when it comes to letting agents. The alternative, which was not chosen by the government, would be to launch a set of national standards and rules to ensure the professionalism and ethical conduct of all letting agents.
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An advertisement appears in a national newspaper offering a “£1 million commission”. All you have to do is find a tenant for an 110,000 sq.ft warehouse in London’s Docklands (it’s £7 a foot in case you’re interested).
Doesn’t seem too difficult, I thought that was what estate agents were paid to do. I call up the company offering the deal, Managing Partners Ltd, to find out more.
“Yup, all you’ve got to do is find a tenant to sign a 15-year lease and we’ll pay £1m on the signature of the lease.”
Crikey, this sounds more like investment banking than property. Are things looking up?
“Looking up?” Comes the response. “If they were I wouldn’t have to pay £1m to find a tenant.
“They’re as rare as rocking-horse manure.”
Telegraph
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