Why Are More Landlords Turning to Letting Agents for Compliance Support?
Chloe Grima ·
With increasing legislation, rising costs and growing administrative responsibilities, landlords are reconsidering how they manage their rental properties.
New research suggests that compliance is becoming one of the biggest reasons landlords turn to letting agents for professional support. However, while some are seeking expert guidance, others are choosing to manage their properties independently.
1. Compliance Is a Leading Concern for Landlords
According to recent research by property management company August, reported by The Negotiator, around two-thirds of landlords have changed their property management arrangements within the past two years.
The research found that 26% had started using a letting agent, 12% had switched agents, while approximately a quarter had moved away from an agent to manage their properties themselves.
The main reasons for changing arrangements included:
27% cited compliance and legal complexity.
22% wanted greater control over their properties.
20% experienced poor service.
14% were concerned about management fees.
These findings highlight how compliance requirements, costs and service expectations are influencing landlords' decisions.
2. Rising Costs Are Influencing Landlord Decisions
While professional management can provide valuable support, fees remain an important consideration for landlords.
The research found that almost one in ten landlords who currently pay or have previously paid management fees were charged more than 15% of their rental income, while 58% reported paying at least 11%.
For example, a landlord receiving £1,200 in monthly rent would pay £144 per month in management fees at a 12% rate, adding up to £1,728 annually for just one property.
Looking ahead, 58% of landlords currently using a letting agent expect to manage their properties independently within the next two years. Across all respondents, this figure rises to 69%.
For letting agents, these findings highlight the importance of demonstrating value through expertise, efficiency and reliable service.
3. Legislation Remains the Biggest Worry
The research also explored landlords' main concerns over the next 12 months.
Legislation topped the list at 26%, followed by void periods and mortgage rates at 19% each, and taxation at 13%. Only 2% reported having no particular concerns.
Additional reporting requirements are also increasing the administrative burden for landlords within the scope of Making Tax Digital.
The findings revealed that:
41% anticipate spending between four and eight hours.
34% expect each submission to take more than a full working day.
6% believe the process will take less than an hour.
Across four quarterly updates, this could mean between 16 and 32 hours of additional administration annually for many landlords, with some spending considerably longer.
4. What Does This Mean for Letting Agents?
As landlords face greater regulatory and financial pressures, letting agents have an opportunity to demonstrate the value of professional property management.
However, with some landlords considering self-management, providing a reliable and efficient service is more important than ever.
For agencies, this means finding ways to maintain high standards of service while managing their own increasing administrative responsibilities.
From tenancy management and regulatory compliance to rent collection and client accounting, these essential tasks all require time, resources and attention to detail.
Reducing the workload behind the scenes can help agents focus more of their time on supporting landlords, building relationships and growing their businesses.
5. The Value of Professional Support
As landlords navigate increasing legislation, rising costs and changing expectations, the role of letting agents is becoming more important.
The findings highlight an opportunity for agencies to demonstrate their value through specialist knowledge, reliable service and effective compliance management.
At The Letting Partnership, our CMP HealthCheck helps letting agents identify potential client money compliance issues and strengthen their processes, providing additional reassurance as regulatory requirements evolve.
