Almost two-thirds of letting agents have seen compliance and administrative workloads increase since the Renters’ Rights Act came into force but seven in 10 believe the reforms will make their services more important to landlords.
Research from The Letting Partnership found 62.5% of agents are spending more time on compliance and administration four months after the legislation was implemented.
Almost three in 10 – 29.2% – report a significant increase in workload, while 33.3% have experienced a slight rise.
Increased administration was identified as the single biggest operational impact of the reforms by 45.5% of respondents, followed by increased disputes or uncertainty at 22.7% and additional compliance work at 18.2%.
AGENTS GROW IN IMPORTANCE
Despite the additional workload, 70.8% believe the increased complexity of the private rented sector will make professional letting agents more important to landlords.
A quarter expect agents to become significantly more important, while 45.8% anticipate their role becoming somewhat more important.
The industry also appears to be adapting, with 79.1% of respondents describing their businesses as completely or mostly prepared for operating under the new framework.
However, landlord sentiment remains weaker. Some 62.5% of agents report that the Renters’ Rights Act has negatively affected sentiment among their landlord clients, compared with 16.7% who have experienced a positive impact.
SUPPLY CONCERNS
Half of agents expect the private rented sector to be weaker in 12 months, while 33.3% expect little change and 16.6% believe it will be stronger.
Reduced rental supply is the most commonly anticipated long-term consequence, cited by 38.1%, followed by fewer landlords at 33.3%. Some 14.3% expect higher rents, while 9.5% believe the biggest impact will be increased use of managing agents.
Chris Mason (main picture, inset), Chief Operating Officer at The Letting Partnership, says: “More administration, greater compliance requirements and increasingly complex processes all require additional time and resources.
“Interestingly, that same complexity could ultimately strengthen the case for professional management. Landlords are being asked to navigate an increasingly demanding regulatory environment and, for many, having a professional agent with the right expertise, client accounting systems and compliance processes in place will become more valuable rather than less.”
He adds that agencies best placed to benefit will be those with the operational and client accounting infrastructure needed to handle the additional workload efficiently and compliantly.
