According to Landlord Mortgages, the UKs largest buy-to-let broker, 22 per cent of landlords who used letting agents in 2005 intended to manage their own property at the end of their current tenant’s lease.
However, figures revealed that this has dropped to just 4 per cent in 2006 and 52 per cent of those who now plan to use a letting agent said it was because of the upcoming introduction of the Tenancy Deposit Scheme.
From October 2006, all landlords will be legally required to join either a custodial or insurance-based version of the scheme in a bid to safeguard consumers against rogue landlords who illegally retain all or part of a tenants deposit when they vacate the property.
While these new rules hold obvious benefits, many property investors fear that they will substantially increase the level and complexity of administration required, necessitating the use of a letting agent.
Lee Grandin, managing director of Landlord Mortgages, said: While we welcome any move which benefits consumers and improves the image of the buy-to-let market, this research reveals the hidden impact of regulation especially the Tenancy Deposit Scheme.
As the market becomes increasingly complex such legislative changes may even lead to some landlords abandoning the sector altogether a move which would adversely affect consumers over the long term.
