Landlords increasingly use letting agents amid Renters Rights Act challenges
The proportion of rental properties managed by letting agents has risen to 66%, driven by the complexities introduced by the Renters Rights Act and evolving compliance demands.
New research from Pegasus Insight reveals that two-thirds of landlords now engage letting agents for some or all aspects of property management, marking the highest level in two years. This increase reflects landlords’ responses to the heightened regulatory environment following the implementation of the Renters Rights Act and other compliance changes.
According to the Landlord Trends report, 25% of rental properties are now fully managed by agents, up from 20% in the previous quarter. Meanwhile, 34% of landlords use agents solely to find tenants, and 6% employ agents for letting and rent collection, leaving 34% of properties self-managed.
Details of landlord management trends and time commitments
The research highlights the significant time landlords spend managing their portfolios. On average, landlords dedicate 33 hours per month to property management. Those self-managing spend around 51 hours monthly, compared with just 11 hours for landlords using full management services.
Time spent managing properties also correlates with portfolio size. Landlords with one to five properties spend about 18 hours monthly, whereas those with 11 or more properties invest approximately 83 hours. Interestingly, landlords with larger portfolios and multiple buy-to-let mortgages are less likely to outsource management, with 39% of their properties self-managed, compared to 31% for those with fewer mortgages.
Pegasus Insight suggests this may be because larger portfolio landlords are more likely to be full-time landlords, with 37% of those holding four or more buy-to-let mortgages working full time in the sector, compared to 13% of landlords with one to three mortgages.
Implications of the Renters Rights Act on landlord responsibilities
The Renters Rights Act has introduced more stringent regulatory requirements, increasing the administrative and compliance burden on landlords. This legislation aims to enhance tenant protections, but it also means landlords must navigate more complex rules around tenancy agreements, possession proceedings, rent collection, and property standards.
As a result, many landlords find professional letting agents better equipped to handle these demands. Agents can offer expertise in compliance, tenant vetting, rent collection, and legal processes, reducing the risk of errors that could lead to penalties or disputes.
The rise in full management service usage reflects landlords’ desire to delegate day-to-day responsibilities, especially those juggling rental duties with other commitments or lacking the time to keep abreast of regulatory changes.
Practical effects for landlords and letting agents
For landlords managing smaller portfolios, the decision to use letting agents may hinge on balancing control with convenience. While self-management can save fees, the time investment and risk of non-compliance are considerable. The data shows that landlords who self-manage spend nearly five times more hours monthly than those who outsource fully.
Letting agents face increased demand for full management services, which may require expanding their compliance expertise and operational capacity. Agents must stay updated on evolving legislation, including the Renters Rights Act, to provide accurate guidance and maintain service quality.
Landlords should consider the costs and benefits of employing agents, especially as regulatory complexity grows. Full management can mitigate risks and reduce time spent, but fees and agent quality vary widely. Partial services, such as tenant-finding or rent collection, may suit landlords seeking a middle ground.
Uncertainties and ongoing considerations in the regulatory environment
While the Renters Rights Act has settled into effect, further regulatory adjustments and enforcement practices remain uncertain. Landlords should monitor government updates and sector guidance to anticipate changes that may affect tenancy agreements, possession procedures, or property standards.
Additionally, the impact of increased agent usage on rental yields and tenant experiences is yet to be fully understood. Some landlords may face challenges in finding reputable agents or navigating service contracts, especially in competitive markets.
Landlords with larger portfolios who currently self-manage might reassess their approach as compliance demands intensify. However, the decision to outsource will depend on individual circumstances, including landlord expertise, portfolio size, and financial considerations.
What landlords should consider now
Landlords should review their current management arrangements in light of the Renters Rights Act. Those self-managing must ensure they fully understand their legal obligations and have systems in place to maintain compliance. Keeping thorough records of inspections, repairs, tenant communications, and safety checks is essential.
Exploring professional letting agents for full or partial management services could provide relief from administrative burdens and reduce compliance risks. Landlords should vet agents carefully, checking credentials, service offerings, and fees to ensure value and reliability.
Regularly updating tenancy agreements to reflect legislative changes and seeking advice on possession and rent collection procedures will help landlords avoid disputes and legal pitfalls. Staying informed through trusted industry sources and membership organisations is advisable.
Supporting landlords through compliance with TLA resources
The Landlord Association (TLA) offers membership options that provide access to practical compliance resources and guidance tailored to the evolving regulatory landscape, including the Renters Rights Act. Members can benefit from document support, up-to-date legal information, and sector insights that help manage the complexities of property letting.
TLA’s new property management and compliance platform, ORBIT, is currently available in BETA testing. ORBIT aims to assist landlords and letting agents in organising property portfolios, managing rental documentation, recording key actions such as repairs and inspections, and accessing compliance materials. This platform could be particularly useful for landlords adapting to increased regulatory demands and considering whether to outsource management tasks.
Exploring TLA membership and ORBIT BETA access can support landlords in maintaining compliance, reducing administrative burdens, and preparing for future regulatory developments.
Looking ahead, landlords should remain vigilant about regulatory changes and consider how best to balance control, compliance, and convenience in managing their rental properties.
Sources: Landlord Today
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