In the latest episode of The Home Stretch, CEO of The Guild of Property Professionals, Iain McKenzie, chat to lettings legend, Sally Lawson, CEO and Founder of Agent Rainmaker, growth experts specialising in letting agency training.
Speaking about how she started within the lettings sector over 30 years ago, Lawson says that it all began when she bought her first property in 1989. “The moment I was old enough to, I bought my first flat when the interest rates were around 15%. This meant that I didn’t have much money left over for furniture, or for that matter, milk in my cornflakes. Despite the challenges I was happy that I achieved my goal of becoming a homeowner. However, not long after moving in, I decided to rent the property out (listen to the podcast to hear the full story). When the lettings agent came around to have a look at my property, I thought what an interesting career that would be, so I asked if they had any jobs going, which they did, and that is how I got into the industry,” she adds.
After gaining some experience, Lawson left the business she was working for to start her own lettings business at the age of 18 years old. “I could see that there was a massive opportunity within the lettings sector in 1989/1990, a time when the assured shorthold tenancy had been created from the housing act. This meant that there was the prospect for landlords to do short-term lettings as opposed to the old stationary periodic tenancy. The sector was growing and there was an opportunity for a lettings business to thrive,” she comments.
Lawson poured herself into learning as much as she could about the sector, legislation and successful tried and tested practises used by the top lettings agents around the world. It is this knowledge, coupled with her experience that has led to the business’ success and her becoming a market-leading lettings trainer. “I am consistently learning and seeking out as much information about the sector as possible. Having extensive knowledge has helped our business and agents take on difficult situations that other agents may shy away from. It is about being able to deliver a high-value service to our clients, rather than just collecting rent and forwarding it on. Knowledge is opportunity for agents. If you have knowledge and can deal with complex issues, you have the ability to charge more, do more and serve more, providing huge value to your customers,” says Lawson.
McKenzie asked Lawson about the changes she is seeing in the lettings sector at the moment and what insight she could provide to agents. “We all thought the tenant fee ban was the end of the world, however, it all made us stop and look our businesses and revamp them, which ultimately has turned out to be a good thing. What we now have is a variety of lettings agents niching out into different areas of expertise and offering a wider range of services,” says Lawson. “Since then, we have had a new evolution of the let-only landlord, which is a big thing now. There is a massive rise in landlords choosing to let and manage their own properties, with the recent governments white paper announcing a figure of only 18% of landlords use a lettings agent for fully managed. I was quite shocked by that number. There is another number that says that 49% of landlords use a lettings agent to let the property, but less than 20% put their property through a managed service. That must be one of main challenges facing lettings agents now. Another challenge is that many of the landlords who purchasing their property 25 years ago are coming to the end of their mortgages, and many don’t have a repayment solution, so are deciding to sale or retire. This will bring about a sort of changing of the guard, which is a potential challenge. The third challenge, which will also impact the sales sector, is the rising costs.”
She continues, “I think the reason that many landlords are choosing let-only at the moment, is simply because they believe they know enough to let and manage the property themselves. The reality is that most landlords who own one or two properties, will only know the basics and certainty don’t know all 170 pieces of legislation that apply to lettings or what happens if the fall foul of them. The key thing that agents need to do it to educate landlords and help them understand the potentially painful consequences of not adhering to the legislation. Looking at the statistics the government released, as lettings agents we need to be focused on the 18%, and work on converting let-only landlords to fully managed. There are a lot of landlords out there who will be falling foul of very dangerous rules who will have a lot of problems. I think it is our duty to help them by helping them understand what they don’t know and getting them converted to fully managed – it needs to be a number one priority,” Lawson concludes.
Listen to the full episode here.