The Buy to Let property boom over the past decade has seen a flood of new landlords enter the market.
But with over 145 individual laws and more than 400 regulations to follow, it is surprisingly easy for even the most wellmeaning landlord to end up breaking the law. New research from property marketplace, TheHouseShop.com, has shed light on the scale of the challenge that landlords face and how they are dealing with the increasingly complex issue of regulatory compliance.
Shockingly, almost 1 in 5 landlords (18.2 per cent) said they find it impossible to keep up with regulation changes – with a further 30 per cent saying they find it very difficult and another 31.2 per cent finding it quite difficult. The results show that landlords are being overwhelmed by the volume and complexity of rules and regulations in the rental market. Compliance with law and legislation was listed as the most challenging aspect of managing a rental property by almost two thirds of landlords. Hiring a letting agent to manage their properties should remove the stress of compliance, but many landlords do not want to hand over 10-15 per cent of their rental income for a management service.
Landlords are also wary of the fact that the cost of using a letting agent could increase even further when the Tenant Fees Ban comes into force. Research from ARLA Propertymark found that tenant fees make up on average one fifth of letting agents’ revenue and that two thirds of letting agents would recover losses from the fees ban, by increasing costs for landlords. This leaves landlords in a difficult position, facing increasingly complex and difficult to manage compliance responsibilities on one side and increasing costs for professional management on the other. TheHouseShop has launched a fixed price property management service offering a range of services normally provided by a traditional letting agent, but at a lower price. They believe the new service offers a win-win solution for landlords, allowing them to keep their rental business compliant with regulations, but without losing out on a sizable chunk of their rental income.
Nick Marr, co-founder of TheHouseShop, said the drive to improve standards in the rental industry is putting additional pressure on landlords and shaping the services on offer at TheHouseShop.
“It’s a really difficult environment that landlords are operating in at the moment. The Government has undertaken a range of measures to try and drive up standards and while this is by no means a bad thing, it does mean that landlords have increasingly complex and wide-ranging responsibilities to deal with.”
“After speaking with our landlords, it became clear that compliance was a huge concern, but many of them simply weren’t prepared to hand over 10-15 per cent of their rental income to have a professional manage their properties for them. Our fixed price model means that landlords no longer have to choose between losing out on rental income and spending hours and hours dealing with compliance issues.”
TheHouseShop Property Management service charges a fixed fee of £59.99 per month, regardless of the landlord’s rental income. This makes the new service particularly attractive for landlords with properties in high value areas. As well as the standard property management duties, such as dealing with tenant enquiries, arranging repairs, handling compliance responsibilities and managing rent collection, landlords using the new service are also given access to a free legal advice helpline.