When Margaret Thatcher declared her belief in a ‘property-owning democracy’ and introduced Right to Buy in 1980, the UK was converted into a country obsessed with homeownership. But while many of us are preoccupied with our homes and how much they are worth and the majority of young Britons would like to be homeowners, most believe they will be unable to raise the funds they need to get on to the property ladder.
The highest achieving negotiators are target-driven, so let them do their job and outsource other tasks. Adrian Kelly, LetCheck Inventories
This combination of continually increasing property house prices and tougher mortgage lending conditions is threatening to send into reverse the explosion in homeownership initially stimulated by Thatcher, making Britain more like Europe, where living in rented property is standard.
Despite initiatives like the Help to Buy scheme, stamp duty changes and the new property ISA, over 90 per cent of tenants do not think they will be able to afford a property, as rents continue to rise and property prices stay firmly out of their reach, according to research by Property Let By Us.
“Many tenants are still unable to afford to buy a property,” said Jane Morris of Property Let By Us. Home ownership fell to its lowest in 29 years, suggesting Britain is indeed becoming a nation of tenants.
Increasing numbers of buy-to-let landlords are reaping the benefits of high rental demand, and so too are many letting agents, but only those agents who have the experience in lettings and management and the resources – namely personnel – to work across various in-house departments will be able to cope. Many estate agencies that have started to o er lettings to raise revenues, could be more in need of external support than they realise. However, help is at hand, and outsourcing some of the work is a great idea, but it is vital to partner with the right companies.
All services are important and if you are a smaller firm you have to rely on providing the best service. Hedie Yeganeh, Lettings Manager, Fine & Country, Mayfair.
Hedie Yeganeh, Lettings Manager of Fine & Country Mayfair, said, “All property related services are important to estate agents in all locations, especially if you are a smaller firm and have to rely on providing the best customer service to be recognised as an agent.”
As you evaluate your choices in outsourcing different components of your operations, you will need to consider the advantages that outsourcing can bring; well managed, it should help your company grow and save money.
A host of niche companies now support the industry; using their resources is a great way to ensure expertise. Victoria MacKinnon, Waterfords
“For some agents, outsourcing is an excellent way to ensure that they are providing the highest level of expertise in all areas of the lettings process to both their tenants and landlords,” said Victoria MacKinnon, Head of Lettings at Waterfords. “As the Private Rented Sector has grown, a host of niche companies have launched to support the industry, and drawing on the resources of expert inventory and tenant referencing firms, for example, is a great way to do this.”
There are many other advantages of outsourcing work, which includes allowing Negotiators to focus on core activities like letting properties, rather than dealing with the back office operations of a company. “The best negotiators are often the worst administrators,” said Adrian Kelly of LetCheck Inventories.
“The highest achieving negotiators tend to be very target driven,” he added. “Using other experts in their chosen fields should free up resource for our clients to do what they are best at.”
Despite the temptation to try and save money, it is crucial that landlords avoid cutting corners, and potentially costly deposit disputes, by having comprehensive check-in and check-out inventories in place.
“LetCheck Inventories carries out residential property inspections and aside from protecting landlords’ properties and tenants’ deposits, crucially we help protect our clients’ reputations,” added Kelly.
To avoid problems, Danny Zane, Director of My Property Inventories, advises agents to not undertake an inventory in-house, but rather use an independent professional inventory firm, regulated by the Association Of Independent Inventory Clerks, in order to provide an unbiased and impartial true reflection of the condition of the property.
Zane says that inventories produced by a landlord or agent, even when signed and fully photographic, can cause conflicts which could make it harder for the landlord or agent to make a successful application to the tenancy deposit protection scheme holding the tenant’s deposit with a view to deducting money from the tenant to repair or replace damaged goods.
An independently compiled schedule of condition, on the other hand, could make disputes that may arise at the end of a tenancy potentially easier to resolve justly, as it may appear to be far more impartial.
“Assessing wear and tear properly needs independent and experienced assessors who can ensure that there are solid grounds for any charges raised against the tenant, backed with hard, irrefutable evidence,” said Zane.
Until recently, Energy Performance Certificates (EPCs), which were introduced in 2007, were considered by some to be something of a blunt instrument, having made little discernible difference to housing stock in the country, but industry attitudes are now changing, and there are several good reasons for the change.
Landlords with F or G EPC rated properties may need to improve energy efficiency by 2018, in accordance with new minimum energy efficiency standard laws being introduced.
In addition, by April 2016 tenants will be given the right to request consent to carry out energy efficiency measures.
Chris Gauld, CEO at Spark, commented, “Landlords are under increasing pressure to go green. From 2016 no tenant request to make reasonable energy efficiency improvements may be refused and by 2018 all private rented properties must be at least EPC rating ‘E’ to be legally let.”
Mansons, a lettings agency based in Newcastle upon Tyne, are currently in the process of writing to all their existing landlords to inform them of the change in legislation, and to let those whose properties fall under the lowest energy efficiency categories know that they could soon be forced to make upgrades if they wish to continue to rent their properties.
“Working closely with Evolve Partnership on those properties that don’t meet the required rating, we set out with measures needed to be installed in order to increase the energy rating so that they can be let,” said Nick Manson of Mansons. “When the regulations take effect they will apply, not only to new lets, but also to existing tenancy renewals.”
While the majority of letting agents would not think twice about outsourcing inventories or EPCs, among a host of other crucial services, there are other jobs that some agents think should simply be kept in-house, such as property management.
“Why should we give away our management fees by outsourcing this work?” asks Daniel Cohen, Senior Lettings Negotiator at Links estate agents in north London. “By managing properties in-house, we are able to keep greater control of the properties on behalf of our landlords, while earning more in commission.”
But Sarah Rushbrook of Rushbrook & Rathbone, which provides outsourced property management services, believes that many letting agents, especially those untrained in property management, fail to appreciate how costly providing an adequate and effective property management service can be, while there are plenty of potential legislative traps to look out for.
“The potential for pitfalls in today’s market environment is extremely high, leaving many opportunities for agents to get it wrong when it comes to property management,” said Rushbrook.
“In the current market, with all the legislation that is now in place, ensuring that your landlord gets the highest level of professionalism in all aspects of his or her let, will enhance an agent’s reputation and give them the edge over competitors.”
Rushbrook adds that while it may seem attractive to an agent to carry out all property management work in-house, the expenses do not always stack up.
She added, “The cost of employing qualified and competent staff means that if you have a managed portfolio of under 90 properties, it is unlikely to be worth it. You also don’t have any worries about sickness and holiday cover, and you only pay for the service that you use.”
There has been a significant rise in the volume of letting agency calls being handled by call centres, as more agents turn to virtual receptionists to help cope with busy workloads.
Moneypenny, for example, which has a dedicated property team answering telephone calls, now works with over 850 agents; answering in the region of 1.2 million ‘overflow’ calls a year for the sector.
“We have had a flying start to 2015, and a very busy first quarter with call volumes high, as more and more agents recognise the benefits of engaging with an outsourced partner to ensure they capture every opportunity,” said Moneypenny’s Commercial Director, Joanna Swash.
Swash added, “Effective outsourcing is not about being a supplier – it’s about building a great relationship as a seamless extension of the agent’s in-house team.”
Help to let
From inventories and booking in EPCs to property management and using external call centres, this is just a snapshot of outsourcing services available to help support letting agents in their day-to-day roles, designed to ensure that agents can focus on what they do best; build a business by letting properties on behalf of your clients.
- Fine & Country Mayfair www.fineandcountry.com
- LetCheck Inventories www.letcheck.net
- Mansons www.mansons.net
- Moneypenny www.moneypenny.co.uk
- My Property Inventories www.mypropertyinventories.co.uk
- Property Let By Us www.propertyletbyus.com
- Rushbrook & Rathbone www.rushbrookrathbone.co.uk
- Spark www.sparkenergy.co.uk
- Waterfords www.waterfords.co.uk
Have your say