How to Choose Your Letting Agent
Are you in the market for a letting agent? How do you even begin to choose?
Are you a landlord looking to grow your portfolio? Then you’re going to need professional expert help, so let us know!
Today, we’re looking at how you can go about choosing the RIGHT letting agent for you. There are thousands of agents to choose from, but we’ve got some top tips to help you narrow down your search.
Self-managed or letting agent?
The first question you need to ask yourself is – do you need a letting agent? Many landlords manage their properties by themselves, without the support of a letting agent, in order to save on costs.
While many landlords do this very successfully, it’s not necessarily for everyone.
- If you’re a new landlord, you might want a guiding hand and experienced partner to help you avoid common pitfalls and get you the best tenant
- If you have a day job, it’s wise to have someone else on hand to help should there be an emergency, for example
- If you live abroad, it’s much harder to deal with your rental business. Yes, you could ask a friend or family member to help, but that can get complicated fast, so keep it professional and work with an expert
- If you simply have a busy life, it can be easier to take this off your plate and let someone else take care of it for you
So, if any of those apply to you – where do you start? Well, we can help you with that – so book a call if you’re on the lookout for a new letting agent. But if you want more information, we’ve got that too!
What qualifications and accreditations are required?
There’s a few things to look out for, so here are some things you should check out before signing on the dotted line:
- Qualifications. There are no official qualifications that you can take to become an agent. So don’t be worried if your letting agent doesn’t have any to show. However, if your potential agent is bragging about a Masters degree in renting… you should probably be concerned here, as that doesn’t exist and sounds like they’re trying to bamboozle you
- Accreditation. Agents do not have to be accredited, but it’s a point in their favour if they are. Propertymark is the professional body for the property sector, so check to see if the agent you’re interested in is accredited with them, as then you can be assured that the agent has further support behind them.
- Regulation. This varies wildly across the UK and Northern Ireland. In Scotland, for example, letting agents are required to join the Scottish Government’s Register of Letting Agents, pass a ‘fit and proper person test’ and comply with a Letting Agent Code of Practice. In Wales, they must be suitably trained and licensed under Rent Smart Wales. But there are no similar requirements in England or Northern Ireland. Be sure to check the requirements where you and your agent are based and ensure your agent is adhering to them.
- FCA Authorisation. In the UK, any individual or business carrying out a “regulated activity” must be authorised to do so by the Financial Conduct Authority (FCA). So make sure that your agent, or the agency they work for, is registered if they are offering rent guarantee insurance, advising on mortgage contracts or offering legal insurance indemnity. If they’re offering any of that without the FCA authorisation, that’s a big red flag!
- Client Money Protection Scheme Membership. Since April 2019 it has been a legal requirement for every letting agent to be part of a Client Money Protection (CMP) Scheme, and have a certificate to prove their membership. This means that the agent holds their clients’ money in a bank or building society which has been authorised by the Financial Conduct Authority and has professional indemnity insurance.
- HMRC Registration. In order to combat money laundering, letting agencies must be registered with HMRC.
- Redress Scheme Membership. Since October 2014, every agent must be a member of a government-approved letting agency redress scheme so that consumers have an official body to lodge complaints against letting agents and claim compensation.
If your potential agent is missing any of these – these are big red flags and you should avoid!
Who is responsible for what?
Ultimately, it’s important to remember that even if you use a letting agent, the buck stops with you. You could still be liable for any fines if the certifications etc. aren’t up-to-date. So it’s better to think of it as a partnership rather than a handover.
We’re mentioning this because it’s not something that you can take for granted. Back in 2021, it was found that PurpleBricks had failed to complete the mandatory paperwork for an unspecified amount of deposits. When you are reliant on an agent to do all that needs to be done – you want to know that they are dotting all the i’s and crossing all the t’s.
Make sure that you’re still on top of when your certificates need to be updated, as well as local licensing. If you would prefer your letting agent to manage all of this on your behalf, then you need to ensure that it is in your written agreement with your letting agent.
So take some time to consider what it is that you want your letting agent to do and be responsible for and ensure that the contract is written accordingly. We’d also recommend that you check in with your agent regularly, just to double check that they are managing your certifications when they are due to renew and that the deposit is all taken care of.
What if your agent lets you down?
We highly recommend that you work with an established agent for a few reasons:
- You know they are experienced and can therefore rely on them
- You can check the reviews and make sure you’re happy before you commit
However, you may find yourself in a situation where your agent has let you down. Maybe they dropped the ball on certification or have been slow in getting the rent over to you.
An agent has a contract with you and they are bound by the terms of that contract and must carry out any work for you with reasonable skill and care and, if they don’t, you are entitled to claim compensation.
This is why you want to be assured when taking on an agent that they are a member of a government-approved letting agency redress scheme, as we mentioned earlier, so that you have somewhere to go if you feel your agent is letting you down. This should absolutely be your first port of call if your agent hasn’t responded to your feedback.
Working with an agent can take an awful lot of stress off your plate – but only if you have the right one! So definitely make sure you do your due diligence before you commit. As we’ve said already, we can help with that, so book a call if you want to know more.
