Letting agent use hits two-year high: Pegasus – Mortgage Strategy

The proportion of rental properties using letting agents has reached its highest level in two years, with 66% now employing an agent for some or all aspects of the letting process, Pegasus Insight reveals.

The latest data shows the figure has risen from 61% in the first quarter of this year and 62% a year earlier, with the increase driven primarily by growing demand for full property management services.

A quarter (25%) of rental properties now use a full management service, up five percentage points from 20% in the previous quarter.

For those properties not fully managed, 34% of rental properties use an agent solely to find tenants, while a further 6% employ an agent for letting and rent collection. The remaining 34% are managed without an agent.

The research also highlights the time commitment involved in managing rental properties, with landlords spending an average of 33 hours per month overseeing their portfolios.

Those who manage their properties themselves spend an average of 51 hours per month on rental management, compared with just 11 hours among landlords employing a full management service.

The time commitment also increases considerably with portfolio size. Landlords with between one and five properties spend an average of 18 hours per month managing their rentals, rising to 83 hours for those with 11 or more properties.

However, larger buy-to-let (BTL) borrowers are not necessarily more inclined to outsource management.

Among landlords with four or more BTL mortgages, 39% of properties are self-managed, compared with 31% among those with one to three mortgages and 33% among those without mortgage borrowing.

This may reflect the fact that larger portfolio borrowers are considerably more likely to be full-time landlords, with 37% of those holding four or more BTL mortgages operating full time, compared with 13% of those with one to three mortgages and 18% of those with no mortgage borrowing.

Pegasus Insight director Bethan Cooke says: “Being a landlord has become an increasingly demanding responsibility, and the legislative and regulatory changes now facing the Private Rented Sector are adding to that complexity.”

“It is perhaps unsurprising that more landlords are choosing to seek professional support, particularly with the day-to-day management of their properties.”

“The difference in the amount of time spent managing properties is striking. For landlords who are juggling rental responsibilities alongside other commitments, or who are concerned about keeping pace with changing requirements, a good letting agent can provide valuable expertise and take on a substantial administrative burden.”