Letting agents will have to make up for lost income
With the introduction of the Tenant Fees Act on 1 June, letting agents will have to generate new income streams and become more efficient to replace lost revenue from tenant fees, PayProp has argued.
Neil Cobbold, chief operating officer said agents may potentially increase landlord management costs where necessary. Research by Kent Reliance shows that over a third of landlords are looking to cut their annual costs, with 30% saying they want to reduce their spend on letting agent fees.
Cobbold said: “There is no doubt that the introduction of the Tenant Fees Act will require agents to work harder to retain existing business and secure new clients.
“With all agents in the same position, one could argue there is now a level playing field. That said, market conditions for all agents across England will be challenging.
“The best letting agencies will already have prepared and implemented various strategies to help combat the revenue lost because of the Tenant Fees Act.
“These will include adopting the best PropTech services and products and streamlining their businesses.
“This will allow agents to dedicate more time to their clients and provide outstanding customer service, a cornerstone of the lettings industry which could help an agency to differentiate from their competitors.”
Cobbold added: “While the legislation will undoubtedly help protect renters from a minority of agents that charge exorbitant fees, it will take some time to determine the true consequences of the tenant fees ban and whether it leads to rent rises across the board.
“The future for letting agencies remains bright as the private rental sector continues to grow and the need for professional experts rises in an increasingly complex and regulated lettings market.”
“From here on in it will be the letting agencies with a clear business strategy in place, which invest in technology and take a customer service-led approach, that can reduce the impact of the tenant fees ban.”