Letting Agents Fees Are About To Fall

by : Gordon Marsden

Over the last 20 years there has been a major shift in rental properties from the Government and Social sectors to the private sector. In part this has been driven by the increased investment in buy to let properties as more and more people see this as a way to make money, in particular for future retirement planning.

So, the private rental sector is increasing, not really breaking news maybe however it is the impact this has on the infrastructure that supports the rental market. Traditionally tenants and landlords have relied upon the local letting agent shop to find or let a property. This makes great sense because the tenant is often based in the locality and they just need to walk past the window of a local letting agent to see what is available in the neighbourhood.

But, and there is one, with the proliferation of on line search portals it is increasingly easy to find the property you want by searching on the internet, you no longer need to visit the local letting agents shop. For landlords its not too different either, there is also a wide choice of websites where you can advertise properties to let for free, no fees, just place your add and wait for a tenant to contact you.

Think about this for a moment, if tenants and landlords can find each other through the internet then why do we need a high street letting agent shop? Its true that many landlords will still prefer to have their property professionally managed, but the fees are high for letting agent shops, mainly because someone has to pay their rates and rents for the prime locations in the high street. This is where things are starting to change, e.g. the infrastructure that supports the buy to let market. If we no longer need the letting agent "shop window" then the letting agent should be able to manage properties from a cheaper office away from the high street, these lower costs should then result in lower fees for managed lettings.

Of course things don't change overnight, it is not easy to ditch the high street letting agent shop and take a back street office, as agents still get some leads from window shoppers. But the change is happening. Already we are seeing new letting agents such as LetsManage set up on the internet, as they don't have the high street overheads they can easily provide the same levels of service at up to 50% less. This really is an amazing change, great news for landlords and tenants as lower costs should benefit both.