The impending tenant fee ban is expected to come into force in Spring 2019 and it’s reported that this will cause a significant loss of income for letting agents.
According to 130 letting agency delegates attending three events in October 2018 hosted by ARPM Outsourced Lettings Solutions, over 60% of them are considering outsourcing their tenancy administration and property management services. Reduced income from the tenant fee ban was chosen by attendees as the biggest challenge for their business, followed by the struggle to get new landlords on board. They were advised on the importance of analysing their business and evaluating opportunities for growth. Then how a lettings agency can increase its income, streamline internal processes and utilise the best available PropTech on the market to cut costs and save time.
How many agencies will review their structure and turn to property management services for advice on how to recoup losses caused by the tenant fee ban?
Landlord Charges Set to Rise in Ban Preparation
Some letting agents have reportedly been preparing already to compensate for lost income from the fees ban. A message sent from an unnamed agent to a landlord said they were increasing management fees by 3.5% for newer customers from December and suggested increasing rents to cover the cost. Long-term clients would only see a 1.5% rise but it claimed the average rate increase for other agents in the area would be 5%.
Chief Executive of ARLA Propertymark, David Cox, hadn’t yet seen examples of agents raising landlord fees, but said he wouldn’t be surprised. He commented, “I would suggest it is sensible to prepare the landlords now. These fees aren’t going to go away, they will be merged into something else.
“You can’t take the sort of money out of the industry and expect it to disappear.”
Invest Time to Win Landlords and Grow Lettings
The events called Restructuring your Lettings Business were held in Watford, Guildford and Brentwood but delegates travelled from as far as Somerset and Newcastle to attend.
Simon Duce, Managing Director of ARPM, thinks it’s important that agents don’t bury their heads in the sand and tackle the tenant fee ban head on. However, the popularity of the oversubscribed events ‘astounded’ him. He added, “For many agents, handing over back-office tasks can cut overheads and give them the time to focus on fee-earning activity and growing their portfolios.”
The agents engaged in in-depth conversations on how outsourced tenancy administration and property management solutions can help their business grow while dealing with the tenant fee ban.
Using Professional Expertise from Independent Inventory Clerks
There’s a drive from the government and throughout the industry to increase regulation and professionalism in the letting sector. Outsourcing the duty of inventory reporting can provide peace of mind to landlords. As independent clerks, Assist Inventories adhere to a professional conduct and thorough approach to compiling inventories.
If there are any upcoming law changes or issues that affect properties in London and the surrounding area, a knowledgeable inventory clerk from Assist can provide valuable insights. This knowledge can help regarding environmental issues, property maintenance, and in the event of a tenancy deposit dispute.