Summary of findings
3,428 landlords and 3,949 tenants from across Great Britain took part in our survey during March/April 2013. The aim of the research is to understand how landlords go about choosing a lettings agent and how both landlords and tenants find the experience of dealing with one.
This summary is based on all responses however, as 55% of landlord responses are from landlords we label as “buy to let” (B2L) and the other half are from landlords we categorise as “unintentional” (ULL) (they either answered ‘yes’ or ‘no’ to the question ‘Did you purchase your property with a view to renting it out?’), the answers from these two landlord types are quite different to a number of questions within the survey and some of these we will highlight and the full findings will be reported by the Property Academy separately.
About one third of landlords are relatively inexperienced having owned their property for just 1-2 years. However B2L have typically owned their properties for longer, 79% for 3 years or more and 36% for 10 years+ and ULL much less, exactly 50% for less than 3 years.
63% of landlords own just one property and 16% own two so over three quarters are not professional landlords. Just 6% said they run their portfolio as their primary business.
Confidence in the PRS remains the same as last year – 27% of landlords said it is possible/highly likely they will add to their portfolio in the next 12 months (2012 27%) however this figure climbs for the B2L to 40%.
77% always use lettings agencies to find tenants and a further 16% mostly do.
50% of rental properties are located within 15 miles of where landlords live but for 38% it’s over 40 miles away.
36% of landlords had just one lettings agency give them a valuation/market appraisal, 35% had just two. For agents it’s mostly a one or two horse race.
An almost identical response to last year is landlords citing a lettings agent’s office location as the main reason they ask them for a valuation.
87% of landlords read the literature provided by the agents at the valuation but only 51% visited their chosen agents web site, the exact same number that visited the agent’s office.
39% of landlords were most influenced by the agent’s knowledge of the local area and market.
Lettings agents typically charge 10% regardless of the level of service provided. 21% charge 10% for tenant find only, 35% charge 10% for tenant find and rent collection and 38% charge 10% for tenant find and full management. The next highest %’s are even numbers (8% and 12%) for some reason agents tend to negotiate down 2% at a time.
Only 47% of landlords negotiated on the fee, this figure rises for B2L to 58% and falls for ULL to 37% and whilst 19% of landlords said they chose the agent with the cheapest fee, just 4% said this was the reason they appointed them, 42% said they wanted the fee to be as cheap as possible but this was not the reason they selected their agent, 21% said they selected an agent that was more expensive for other reasons and 34% said fees weren’t the issue in their choice of agent. As previously noted, fees seem to be a much bigger issue for agents than for landlords.
88% of landlords expect their property to be advertised on Rightmove, 41% on Zoopla, 44% on FindaProperty and 32% on PrimeLocation. Just 68% expect their agent to erect a To Let board but 32% do expect social media to be employed.
There was a mixed take up of additional services offered by lettings agents, 44% did agree for the agents to provide an EPC but 22% arranged their own. Just 19% took their agent’s insurance offer with 33% arranging their own.
72% of landlords said their preferred communication method with their lettings agent is email.
45% of B2L primary concern is void periods compared to 34% of ULL whose other main worry is damage to their property (36%).
Even if a new tenant offered a 20% increase in rent 69% of all landlords would stick with their existing tenant, (B2L 66%, ULL 72%).
89% of B2L would recommend their letting agent but just 79% of ULL would, their main issues being communication and problem solving.
36% of tenants searched for a property for over a month, 2/3’s for less than a month.
Roughly a third (34%) of tenants have lived in their current property for less than six months, 31% for 6-12 months and 35% for over a year.
67% intend to stay in their current property and renew the agreement when it expires.
Over a third (38%) of tenants have previously owned a property and 16% still do. 40% choose to rent whilst 60% have to.
18% plan to buy a property in the next 12 months and a further 24% in the next 2-3 years.
Tenants look for a property online, 91% visited Rightmove regularly or occasionally, 56% Zoopla, 35% FindaProperty, 30% PrimeLocation and 28% Gumtree. 46% searched with their mobile phone whilst just 26% looked in a newspaper and only 2% found their rental property there. 55% found their home through a portal, 17% via an agent’s own web site.
As with landlords, the preferred way tenants would like to be contacted is via email (71%).
84% of tenants say they expect the details to include a floor plan.
52% said they thought it important to rent a property through an ARLA agent and 48% said they would pay a higher administration/set up fee to rent a property via a recommended and trusted agent compared with 52% who would prefer a cheaper fee through a less well known agent.
Just 8% took content insurance offered by their letting agent whilst 50% arranged their own cover.
As with landlords, the main complaints regarding lettings agents are communication and problem solving. Whilst 65% said they would recommend their letting agent to a friend just 54% said they would instruct their current agent if they had a property of their own to sell or let in the future.
Key points and actions to consider
- Your tenant is a future buyer, seller and landlord – treat them accordingly.
- The two types of landlord (B2L and ULL) have different needs and act accordingly. Treat each group separately with tailored communications.
- It is no longer (if it ever was) appropriate to skimp on such things as photography and floor plans, treat the presentation of rental property as you would those for sale.
- The business of lettings is conducted online and increasingly via mobile phone. Make sure your mobile site is very easy to use and navigate and consider responsive design (one site that adjusts to all devices).
- Half of all tenants will pay more to rent through a trusted brand. This is a significant opportunity.
- Similarly, landlords are less concerned about the fee they pay and more about void periods (B2L) or their property maintenance (ULL). In the absence of any clear differentiation between one lettings agent and another then fee becomes the only criteria.
- There are many opportunities to sell insurances and other clearly needed/desirable products and services.
Members of the Property Academy receive more comprehensive analysis broken down by property type, geography and price range as well as further insights by landlord and tenant profile. If you would like to find out how to become a member then contact the Property Academy on 01372 370847