In the lead up to the Tenant Fee Ban, which came into effect on the 1st June, speculation was rife about where landlords and agents would recoup the loss of tenant fees. One of the main arguments was that the ban would end up harming the very people it was supposed to help.
According to our survey results, 38% of lettings agents said they will be counteracting the tenant fee ban by simply passing the extra costs to landlords who would subsequently increase tenants’ rents. Now that the legislation has been implemented landlords and agents are understandably looking for ways to be more cost-effective but cutting corners could end up costing more in the long-term.
If agents decide to increase their prices they must improve the services they are offering. Agents should evaluate their processes with a view to implementing a more streamline and cost-effective way to offer services to landlords and be transparent about what they are charging for. Ultimately, building new relationships will increase sales which replaces the loss of tenant fees.
But in a bid to reduce service costs, 15% of agents said they will be looking for cheaper alternatives for services they currently outsource and may look at taking their reporting processes in-house however this could have negative implications. Whilst initial cost savings may look appealing, taking the inventory process in house can end up costing more due to employee costs, training costs, increased cost of equipment and software and having to cover costs such as vehicles, mileage and insurance. By taking inventories in-house also lacks impartiality and perceived bias as it can be a tricky situation for agents dealing with both landlords and tenants or equally for landlords working directly with their tenants.
By outsourcing property inventories to a professional inventory clerk, you gain a professional service that is completed easier and faster without increasing your staff costs and gives the ability to scale up and down during busy/slow periods. It is important for inventories to remain impartial, and even guidance states that reports that are compiled by landlords or agents, rather than an independent third party, will require supporting evidence that the tenant has seen and agreed to the inventory.
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Want us to help you tackle the tenant fee ban? Our property inventory clerks deliver comprehensive property inventories, check-in and check-out services and mid-tenancy inspections for letting agencies and private landlords.