How can letting agents attract new landlords when they’re all selling their portfolios?
That’s a major question for the lettings industry – but in reality, property guru Sally Lawson says there are landlords and agents can grow their businesses despite the challenges within the industry.
“For a number of years, we’ve seen increased concerns around the number of landlords out there,” says Sally – a former ARLA president who now runs Agent Rainmaker to support those struggling to expand their agencies.
“Near the beginning of my career in the 1990s we used to advertise we had ‘over 100 properties available’ but now it’s reported (by statistician Christopher Watkins) there are just 186,000 rental listings across 14,800 registered agents in the UK, meaning an average of just 12 per branch.
“And we’re also seeing an increase in landlords opting to sell some or all of their portfolio due to challenges such as Clause 24 and rising interest rates which have in some cases wiped out all of the profit they previously made.
“But in reality, private rentals make up a much higher proportion of the market than they did back when we were proudly advertising 100+ properties at a time. Around 19% in fact, compared to just 7% three decades ago.
“And we’re also still seeing a very healthy interest from landlords wanting to expand their portfolios which is counteracting the impact of those selling up – in fact, this represents a real opportunity for those agents who offer services to support landlords buying or selling too, as they’re potentially able to support both investors through the process and keep their lettings portfolio at the same time!
“As well as revealing that there are landlords out there, the facts and figures we have available also display where the problem lies.
“A Government white paper released last summer showed us that 82% of landlords were not using agents for property management. This means it’s not truthful to say ‘there are no landlords out there’ but it is true that the majority are either going it alone or under-utilising their letting agent.
“To change this, agents need to focus on how to get those self-managing landlords to sit up and take notice!
“This requires a review of services: is the agent already offering the type of services which overcome the challenges faced by landlords or do they need to be introduced?
“And there’s no use having these services if landlords keep ignoring the need for an agent, so a review of all marketing and communications is needed too.
“Do the agency’s adverts, social media content, website, videos and all other marketing materials effectively portray how using a management service will make a landlord’s life easier (and minimise the risks associated with non-compliance)?
“Does all of the above highlight how much simpler being a landlord is if an agent is handling the day-to-day tasks, the regulatory issues – freeing the landlord of the time and research it takes to try and do it themselves?
“If not, then agents can continue saying ‘there are no landlords out there’ but in actual fact, what they’re saying is ‘I’m not attracting the attention of the landlords out there’. And if they’re not reaching their target audience with their messages, frankly it doesn’t matter whether there are ten or 10 million landlords.”
* Sally Lawson runs Agent Rainmaker *
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