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Rightmove have recently issued a survey into landlord sentiment to help letting agents understand what is on landlords' minds.The report stated:"Recent changes in policy seem to be creating uncertainty in the market, shaking landlord confidence and is causing confusion".The following chart shares insights into what landlords are feeling threatened by:Of 3,500 landlords surveyed on Clause 24, 38% of landlords described themselves as "well informed".This surprised me!What surprised me even more, is that the pie chart above was the sole mention of Section 24 in the report!The main thrust of it was about Right to Rent and how agents could use uncertainty about this to attract more landlord clients.Interestingly, 60% of landlords thought lettings agents should be a credible source of information, up from 36% from the 2014 survey, suggesting that agents have an increasingly important role to play in this regard.Landlord Survey results I believe that agents have a significant role in educating landlords about Section 24, and supporting them through the implementation of it by providing a more "holistic" service.This was echoed by Sam Mitchell, Head of Lettings at Rightmove, who announced to delegates at Lettings Live! the results of their survey of 7,752 landlords’ and tenants’ thoughts on lettings agents.When asked why the survey was important Mitchell, formerly director of property management at Foxtons, said he had never seen so much change to legislation and it was important to take stock of what landlords are actually thinking “rather than what we think they are thinking”.He said sentiment is against landlords and “some feel why do they bother and why not just give up”.Of the 3,500 landlords who responded, 46% said yes when asked if they were considering buying more property. Only 30% said "no" with the rest undecided.Mitchell asked the audience “Do you know the buying intentions of your landlords?” and added: “What are you doing to communicate with them to help them and give them confidence to grow their portfolio?”.He also asked: “What are you doing as a defensive strategy to make sure they don’t sell off their portfolio?”.Source of quoteIt is good to see Rightmove acknowledging that lettings agents may find that increasing legislation and more onerous tax regimes could negatively impact on landlord business volumes, but I do feel that Section 24 should have been given more prominence. I believe it is a vastly bigger threat to the sector than Right to Rent.The lettings agent community really does need to engage with Section 24 in my opinion. There is a worrying lack of awareness of it when I have been talking to agents on this topic.The one agent that seems to be doing so is Belvoir, who made a significant donation to the Judicial Review fund, and also supported the Tenant Tax Summit. Bravo! Belvoir. Other than that, agents don't seem to have Section 24 on their radar imho.Please share on this thread if your agent is aware of this issue and what they are doing to support you.Related content:Property Tribes EXCLUSIVE: Interview with Cherie Blair about the Judicial ReviewProperty Tribes EXCLUSIVE: Interview with Lord Flight Interview with JR Co-Claimant Steve BoltonLandlords unite! Support the Judicial Review of Clause 24 Lisa Orme: "Section 24 is totally wrong" Taking ownership of the big issue - David SmithKriss Akabusi - I'm looking at the man in the mirrorView the letter that the Judicial Review lawyers sent to HMRCAnalysis of the impact of Tax changes on landlords How will you be wording rent increases caused by Clause 24 to your tenants? Are you selling up or disposing of properties because of Clause 24?
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
Section 24 is huge compared to any of the recent changes in legislation.
Many agents have seen extra legislation as an opportunity to sell their full management service to landlords.
Section 24 is different.
It will wipe out a fair number of landlords and that will be as many clients gone for agents.
It will in any case significantly eat into profits and so I think that landlords may put their agents under review because agents' fees will become the major cost they can control and thus may make the difference between a loss and a profit.
Section 24 is a major threat for both landlords and letting agents.
LA are the last people I would rely on for up to date information!!
I informed my LA of C24 and they didn't have a clue
Indeed their response was it mattered not as they would just sell more property as LL sell up!!
Can you imagine such crass stupidity from a LA!?
Very few LA understood how C24 will impact on them.
Some still don't even know what C24 is and the likely effects of it.
It would be useful if RM and zoopla recognised that they would be affected by C24
Fewer LL with fewer properties means fewer listings and therefore less income for the website portals.
RM and zoopla could easily pay into the JR fighting fund to assist the legal action
It is after all in their direct financial interests to ensure that C24 doesn't go ahead.
The amount required to fight C24 is mere chicken feed for these 2 major sites compared to the losses that they will incur when listings substantially reduce.
Section 24 will certainly supply opportunity for lettings agents to differentiate themselves from their competitors in terms of how they support their landlord clients.I hope awareness will increase amongst the lettings community as we also need them on board with regards to the Judicial Review as they can spread JR messages to their landlord list.
What will happen is the traditional High St LA will gravitate towards online LA
Very few LL actually need full LA management services
In pursuit of maintaining their profit margins made more difficult by C24 LL will seek to reduce their costs.
Getting rid of their High St LA is an obvious immediate cost saving
Most LL live within a few hours drive of their rental property
It makes sense to visit the property if ever required
It is perfectly possible to remotely view a property via Skype if the tenant cooperates
If they don't then a personal visit would be required
If LL are to retain profitability LA will be the first cost burden to to be removed.
I fail to see how LA would be able to differentiate themselves in an attempt to retain and attain LL business?
Only a substantial reduction in management charges equal to the income losses caused by C24 would work.
This becomes a nonsensical exercise if C 24 causes the LL to lose some or all of his personal tax allowance, child benefit, pension tax relief
LA face financial oblivion once LL wake up and realise the effects of C24
Just like many hundreds of thousands of LL are sleepwalking to financial oblivion so are many LA
As suggested Belvoir LA are on their game
They know exactly the issues that face them.
It is clear they are fully aware of the impact of C24 on their business profitability
Why is it so many other LA are apparently clueless as to the possible effects of C24!?
I consider it is because most LA haven't a clue what they are doing and exist in their own little world considering that the status quo that has existed for decades remains the same.
They of course couldn't be more wrong!!
We have kept all our landlords informed of clause 24 and encouraged them to help the fight against. So please Paul Barrett stop slagging LA in general and tarring us with the same brush.
LA will continue to do buisness if they are good at what they do. I always encourage LL to look for a independent LA as they are the ones who will have the LL interest, not the big boys or the ones that double up as estate agents as well, edging there bets.
Here are a few things that we do that on line agents don't including helping people with there HB claim (which reduces the voids if that is the only type of tenant attracted to the property). Knocking on doors at all hours to chase the rent and ensure the property is still occupied. Getting tradesman out to sort out urgent issues. Having face to face contact with tenants. This is just to name a few
Property is different for everyone and there is no one size fits al and whilst everyone is welcome to there opinion they shouldn't be tarring people with the same brush and pushing it down everyone's throat.
Manchester based investor. I buy, sell, renovate and rent investment property in East/North Manchester email: email@example.com Call: 0161 681 3724
I am not slagging all LA off
It is of course accepted that High St LA can provide excellent service
No one is disputing that
But it remains a fact that many LL will be looking at dispensing with their LA as an unnecessary cost burden if affected by C24.
Most LL can manage perfectly well without a LA
Yes it might involve a bit more hassle, but certainly NOT 10% commission's worth along with ridiculous tenant source fees of £500 per tenant!!!
That is why I don't use High St LA
Far too expensive and not as effective as online LA when you have far more effective operations like LRSll
I believe High St LA are going to have to use cheaper online methods of delivery if they wish to stay in business
Most of the ones I have engaged with haven't a clue what they are doing
They operate as though no tax changes have occurred or will be occurring
Of course many LA such as yourself are aware of what is going on
They are rarities.
There remains like it or not a substantial knowledge deficit amongst many LA.
Clearly that is not a satisfactory state of affairs
I would question WHY!? are so many LA unaware of the latest tax change effects
Something is clearly going wrong in the LA community that many aren't aware of these severely detrimental tax changes to their LL clients.
Again I believe it is a severe paucity of knowledge among LA and LL
Such severe knowledge shortfalls can cause extreme business detriment
Surely there MUST be systems introduced to ensure that ALL LA and LL are made aware of changes to the PRS!?
I believe the whole of the PRS suffers from a knowledge deficit
It seems only motivated LA and LL etc are prepared to keep themselves abreast of changes in the PRS
That is all very well but it does leave behind the vast majority who remain ignorant to the changes to the PRS that have occurred and will be occurring!
This is NOT a satisfactory state of affairs
I agree that in order to offer a good and comprehensive service, a letting agent should have an eye on the bigger picture for their (client) landlords, and ensure that they offer as complete a service as possible.
In a very real way, a letting agent's role is similar to that of a financial "investment manager". A major change in tax treatment - and one that threatens the financial viability of any geared portfolio - should be brought to their client landlords' attention. Let's face it, if the agent is switched on, they could arrange disposals of property to their other client landlords and charge a commission. Win-win.
Obviously the agent might need to be careful not to stray into giving advice in an area in which they have no qualification, but by hooking up with an accountant/tax adviser, and/or by suitable use of disclaimers, they could avoid taking responsibility and litigation.
Part of the "problem" for s24 is the complexity of the legislation - a couple of academics (Herring & Hutton, British Tax Review 2015) thought that the legislation ought to have been referred to the Office of Tax Simplification! This helps no-one, except lawyers and tax advisors.
I suspect that s24 is something of an opportunity for the proactive agent.
You are absolutely correct regarding the LA role in managing a LL business
A LA needs to be completely holistic as far as a LL business is concerned
If that means they have to join up with other professions to offer that holistic service then so be it.
LA should consider themselves as the protector of LL business
LA are very knowledgeable as to the LL business and are best placed in conjunction with other specialisms to best offer LL possible more effective ways of managing the business
Personally I would have NO objection if a LA I chose to use called me in for a financial review with opinions as to how my business could be more profitable
I certainly accept I don't know it all and would welcome a free review of my business on a periodic basis.
Many LL are disengaged from their business and sometimes a professional LA oversight could be beneficial to LL.
So few LA though possess the professional attributes that a LL could trust
That is why I believe the LA profession needs to be professionalised with formal qualifications etc
This would massively reduce the numbers of LA leaving behind a cadre of highly skilled and knowledgeable LA whom LL could have confidence in their knowledge.
We have to stop the ability of just anyone being able to start up as a LA
The business model of LA needs to be made far more robust
For that to occur we need fewer LA
"I suspect that s24 is something of an opportunity for the proactive agent."
It is a slippery slope when an agent sees an opportunity in something that is so toxic to their clients, though.
I think I am in an Estate Agent most days of the week and I find a great number of staff have no Ideir what clause 24 is
They fully understand Stamp Duty a C12 or CO2 Detectors
But when it comes to taxation they lack a great deal of knowlage
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.